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[2010] ZAGPJHC 141
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Kelly Group Limited v Workforce Management (Pty) Ltd & Others (44740/09, 45110/2009, 51337/09) [2010] ZAGPJHC 141 (10 February 2010)
IN
THE HIGH COURT OF SOUTH AFRICA
SOUTH GAUTENG HIGH COURT
JOHANNESBURG
CASE Nos. 44740/09;
45110/2009;
51337/09
Reportable in:
SAFLII, JDR (Juta) and
JOL (LexisNexis) only
In the matters between:
KELLY
GROUP LIMITED
…...............................................................
Applicant
and
WORKFORCE
MANAGEMENT (PTY) LTD & OTHERS
..............
Respondents
____________________________________________________________
JUDGMENT
____________________________________________________________
WILLIS
J:
[1]
Originally, I had before me no fewer than six applications to be
heard together. The parties have, in the meantime, agreed among
themselves as to the procedure to be followed in three of them. In
all of these matters Kelly Group Limited has been one of the
applicants, Workforce Management (Pty) Limited has normally been one
of the respondents, one Solly Tshiki and various companies
in which
Solly Tshiki has a controlling interest, as other respondents and
the South African Post Office Limited also normally
as one of the
respondents. Solly Tshiki has, indirectly, a majority interest in
Workforce Management (Pty) Limited. For the sake
of convenience, I
shall refer to Kelly Group simply as “the applicant”,
Workforce Management (Pty) Limited as “the
respondent”
Solly Tshiki and the various companies in which he has a controlling
interest, other than the respondent, Workforce
Management (Pty)
Limited itself, as “Solly Tshiki” and the South African
Post Office Limited as “the Post Office”.
Before being
heard before me, the six applications have absorbed the attentions of
Splig, Mathopo, Kgomo JJ and Farber AJ over
the period from late
October 2009 to late January 2010. In respect of the three that I
have now been asked to adjudicate upon (the
three whose case numbers
appear above), 2
nd
February was the return day of various rules nisi issued consequent
upon the orders of Splig J (on 22
nd
and 23
rd
October, 2009) and Kgomo J (on 10
th
December, 2009). In these applications which were brought as a matter
of urgency before Splig and Kgomo JJ, interim orders were
also
issued. The applicant now seeks, in each instance, confirmation of
the rules nisi and that the interim orders should be made
final.
Solly Tshiki and the Post Office seek the discharge of not only of
the rules nisi but also the interim orders. Costs have
thus far
either been formally reserved in each instance or held over for
determination on this the return day. Various so-called
employees of
the respondent have also been cited as respondents in some instances.
I refer to them as “so-called employees”
because, as will
appear later, they are not employees in the conventional sense of the
word. Nevertheless, in order not to confuse
matters further, I shall
refer to these persons hereinafter simply as “the employees”.
[2]
In each instance the rules nisi as well as the interim orders are
prolix. It would be tedious and, in my view, unnecessary to
repeat
them here. The critical issue is whether the respondent and/or Solly
Tshiki should be prohibited from recruiting the employees,
from time
to time, to work for the Post Office on a temporary basis. After much
drama and considerable huffing and puffing, that
is what these cases
are all about.
[3]
The applicant and Solly Tshiki are the sole shareholders in the
respondent. The applicant is the minority shareholder, Solly
Tshiki
holding the majority of the shareholding in the respondent. The
applicant and Solly Tshiki came together as shareholders
in the
respondent in a so-called “joint venture” for the sole
purpose of acting as labour brokers for the Post Office.
The
respondent supplies employees to work on a temporary basis for the
Post Office according to the Post Office’s requirements.
In
effect, that is all the respondent does. There is a so-called
“shareholders” agreement” between the applicant
and
Solly Tshiki which affects their relationship. The respondent has
been providing labour broking services to the Post Office
over
several years.
[4]
The employees number several hundred. From the viewpoint of
employment or labour law, the employees may be described as
“right-less
persons”. Apart from their right to decline
an invitation to take up temporary employment with the Post Office
from time
to time, they have, effectively, no rights whatsoever. They
have all agreed, however, to abide by the rules of the Post Office.
Their agreements with the respondent also deal with certain ancillary
matters such as not consuming alcohol while at work. Many
of these
employees have worked intermittently for the Post Office over a
number of years.
[5]
The joint venture between the applicant and Solly Tshiki was a
soc-called “BEE (Black Economic Empowerment) partnership
deal”.
The applicant may be described as an “old and established”
company. Solly Tshiki is black and has the
useful contacts. It has
become apparent to me with depressing frequency in this, the South
Gauteng High Court, that the relationship
between these BEE partners
often sours. The reason for the souring of relationships in these
“BEE deals” may normally
be attributed to mutual
resentments at having to share the spoils. This souring of
relationships has occurred here. In this case,
Solly Tshiki now
wishes to terminate the joint venture and provide the labour broking
services to the Post Office himself. Furthermore,
the Post Office
sees no need to continue using the respondent as its labour broker.
The applicant is outraged. That is why it has
come to court in the
frenzied manner which it has. Obviously, in consequence of the
termination of the relationship between the
applicant and Solly
Tshiki, the applicant will no longer share in the profits of this
apparently lucrative deal with the Post Office.
[6] I
have been informed from the Bar that, since the applications were
heard before Splig J, the applicant has taken steps against
Solly
Tshiki and others to claim damages arising from an alleged unlawful
breach of contract. The shareholders’ agreement
between the
applicant and Solly Tshiki contains an arbitration clause for the
resolution of disputes between them. I presume that
the correct steps
have been taken. As the resolution of the dispute between the parties
as to damages has still to run its course,
it would be inappropriate
for more to express any view as to the prospects of success in that
dispute.
[7]
The shareholders’ agreement records that “the company’s
(i.e. the respondent’s) sole source of income
is the SAPO (i.e.
the Post Office) contract” and that:
In
the event that the company should lose the SAPO contract or should
SAPO fail to renew the contract (collectively referred to
as a
“termination event”), the basis for the existence of the
company will cease.
Although
the applicant may be understandably distressed that the respondent’s
seemingly lucrative contract with the Post Office
has come to an end,
it has clearly always been within the contemplation of the parties
that “the good times” would
not necessarily last forever.
In any event, it is my understanding that one of the reasons for BEE
partnership deals is to facilitate
the transfer of skills to
historically disadvantaged persons. This, it seems to me, necessarily
entails that most, if not all,
BEE partnership deals will have a
relatively short “shelf life”.
[8]
The shareholders’ agreement also provides that:
For
the sake of clarity, nothing contained in this agreement shall in any
way restrict the shareholders from the conduct of their
business,
including any business that competes with the company.
Counsel
for Solly Tshiki submitted that this means that Solly Tshiki could
act precisely as it has by seeking to secure exclusive
provision of
labour broking services to the Post Office business but the applicant
contends that this necessarily means that Solly
Tshiki could compete
for any business
other
than
that of the Post Office. This is an issue directly relevant to the
question of whether there has been any breach and, if so, what
damages are payable to the applicant. It seems to me that, in order
to decide the matter without prejudicing the parties in their
still-to-be-resolved dispute, I must in this application assume,
without deciding the matter, that Solly Tshiki has, in fact, been
in
breach of contract.
[9]
As the applicant is seeking final interdicts, I must determine the
issue according to the classic test in
Setlogelo
v Setlogelo
1
and
decide whether the applicant has shown, in respect of the relief
sought:
(a) a clear
right;
(b) an injury
actually committed or reasonably apprehended; and
(c) the absence of
similar protection by any other ordinary remedy.
As I
have already said, I have assumed, without deciding the matter, that
an injury, in the form of a breach of contract has, in
fact, been
committed.
[10]
Mr
Wasserman
,
who has appeared for the applicant, has expressly disavowed that his
client seeks relief derived from any field of the law of
competition
other than that which is to be located in Solly Tshiki’s
alleged breach of contract. In any event, in relation
to the list of
employees, it does not seem to me that there is any “capital”
which the applicant has built up which
required any special skills,
expertise, experience, knowledge or information on the part of the
applicant such that this “capital”
deserves special
protection by way of an interdict. Accordingly, although the
applicant may or may not have a clear right to a
legal remedy arising
from the alleged breach of contract, I am far from certain that the
applicant has a clear right to the relief
which it seeks. It is my
understanding of the law that in order to obtain an interdict an
applicant must go further than to establish
that he has a right which
has been infringed in law but must go further and satisfy the court
that the facts justify a final order
(See
Nienaber
v Stuckey
2
).
In case I am wrong in this regard I shall now turn to consider
whether there is an absence of similar protection by another ordinary
remedy.
[11]
It is well established that the courts will not grant an interdict if
the applicant can be adequately compensated for the injury
complained
of by an adequate award of damages.
3
Although the applicant’s rights, in the event of a there being
a breach of contract, may continue to be violated, the quantum
of
damages will be easily established: Solly Tshiki will be receiving
from the Post Office what should have gone to the respondent
to be
shared between the applicant and Solly Tshiki. There is also nothing
to suggest that Solly Tshiki is a “man of straw”
and that
the pursuit of damages would prove to be futile. Accordingly, it
seems to me, that the applicant has failed to establish
that it has
no other ordinary remedy that will afford it similar protection.
[12]
Finally, I turn to consider the question of the discretion of the
court. It seems clear that the court retains a residual,
judicial
discretion as to whether or not to grant an interdict.
4
In addition to other factors, it seems to me to be not irrelevant
that the interdict, if granted, could prejudice the employees
whose
position is perilous enough as it is. Mr
Wasserman
was
astute to remind me that, in deciding this case, I am sitting as a
judge of the High Court and not the Labour Court and that
I did not
have a discretion to decide the matter “according to labour law
principles”. I understood Mr
Wasserman
to mean that I do not have a broad, equitable discretion to do
whatever I consider to be fair in the matter. It hardly needs be
said
that I fully subscribe to the notion that judges do not have a free
rein to do as they please: they are constrained by law.
Nevertheless,
an exercise of a judicial discretion requires, in my view, that the
court should have regard to the full
conspectus
of the facts. It seems to me that it would indeed be legitimate to
have some regard to the interests of the employees, although
I accept
that their interests cannot prevail to the extent that that this
would prevent the applicant from the lawful exercise
of its rights.
[14]
The applicant and Solly Tshiki have both employed two counsel. The
sheer volume of work has justified the employment of two
counsel.
[13] Accordingly,
the following are the orders of the court (in case nos. 44740/09;
45110/2009 and 51337/09):
(a) The rules
nisi are discharged;
(b) The interim
and provisional orders are discharged;
(c) The
applications are dismissed;
(d) Kelly Group
Limited is mulcted in costs;
(e) The costs are
to include the costs of two counsel, as well as all costs reserved to
date.
DATED
AT JOHANNESBURG THIS 10th DAY OF FEBRUARY, 2010
N.P. WILLIS
JUDGE OF THE
HIGH COURT
Counsel
for the Applicant:
Adv.
J.
G. Wasserman
SC
(with him,
G.W.
Amm
)
Counsel
for the Solly Tshiki:
Adv.
A.
Bham
SC (with him,
W.B.
Pye
)
Counsel
for the Post Office: Adv
P.G.
Seleka
Attorneys
for the Applicant: Lowndes Dlamini
Attorneys
Solly Tshiki: Knowles Husain Lindsay Inc
Attorneys
for the Post Office: Madhlopa Inc.
Date
of hearing: 3
rd
February, 2010
Date
of judgment: 10
th
February, 2010.
1
1914
AD 221
at 227
2
1946
AD 1049
at 1053
3
See, for example,
Cresto
Machines (Edms) Bpk v Die Afdeling Speuroffisier SA Polisie,
Noord-Transvaal
1970
(4) SA 350
(T) at 367H-368H (the appeal was dismissed- see
1972 (1)
SA 376
(A)) ;
Erasmus
v Afrikander Proprietary Mines Ltd
1976 (1) SA 950
(W) at 965F-967D;
Minister
of Law and Order,
Bophuthatswana,
& Another v Committee of the Church Summit of Bophuthatswana and
Others
1994 (3) SA 89
(B) at 99G-H.
4
See,
for example,
Transvaal
Property & Investment Co. Ltd and Reinhold & Co v S.A.
Townships Mining & Finance Corporation Ltd. and The
Administrator
,
1938 TPD 512
at 521 (the judgment of Schreiner J, as he then was)
and
Candid
Electronics v Merchandise Buying Syndicate
1992 (2) SA 459
(C) at 464G-465A.