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[2010] ZAGPJHC 5
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Insimbi Alloy Supplies (Pty) Limited and Others v Munsany and Others (09/35493) [2010] ZAGPJHC 5 (26 February 2010)
IN THE SOUTH GAUTENG HIGH COURT
(JOHANNESBURG)
CASE NO 09/35493
REPORTABLE: NO
OF INTEREST TO OTHER JUDGES: NO
REVISED.
In the matter between
INSIMBI
ALLOY SUPPLIES (PTY) LIMITED
FIRST
APPLICANT
INSIMBI
THERMAL INSULATION (PTY) LTD
SECOND
APPLICANT
INSIMBI
TECHNICAL TEXTILE EMPLOYEES (PTY) LTD
THIRD
APPLICANT
and
VINAYAGAM
MUNSANY
FIRST
RESPONDENT
L&S
THERMAL PRODUCTS CC
SECOND
RESPONDENT
MTHOMBENI
TRADING CC
THIRD
RESPONDENT
J U D G M E N T
VAN OOSTEN J:
[1] In this application the
applicants seek an order declaring the first respondent to be in
contempt of court in respect
of his alleged breach of an order of
this court.
[2] For a proper understanding
of the issues requiring determination it is necessary to briefly
outline the salient facts
of this matter. The applicants are all
interrelated companies. The second applicant and the second and third
respondents (who are
nominal parties to this application) are rival
traders and direct competitors in the field of thermal insulation
products. The
first respondent was employed by the second applicant
until July 2009. He was also a shareholder in the second applicant.
The first
and third applicants were also shareholders in the second
applicant. In terms of a shareholders’ agreement, the first
respondent
had undertaken in favour of the second applicant (as his
former employer) and the first applicant (as co-shareholder in the
second
applicant) not to take up employment with a competitor of the
second applicant.
[3] The first respondent with
effect from 1 August 2009 took up employment with the second
respondent. The applicants regarded
the first respondent’s
conduct as a breach of the shareholders’ agreement, which
prompted them to launch an urgent
application in this court for
interdictory relief against the first respondent. The first
respondent filed a notice of intention
to oppose, and gave notice
that certain legal points would be argued but did not file an
answering affidavit. The matter proceeded
to trial and on 4 September
2009, by agreement between the parties, Bregman AJ granted an
order, the relevant part of which
reads as follows:
‘
The first respondent is
interdicted and restrained:
1.1 …
Until 10th July 2010 from
enticing or soliciting or attempting to entice or solicit whether
directly or indirectly any customer
of the Second Applicant or any of
its subsidiaries from time to time including but not limited to those
customers reflected in
annex(sic)“A” and regardless of
whether those customers were existing customers of the Second or
Third Respondent as
at 10th July 2009.’
(The order)
[4] In the present application,
the applicants allege that the first respondent has committed
breaches of the order on five
occasions in respect of five of the
applicants’ customers. In counsel for the applicants’
heads of argument notice
is given that the applicants were persisting
only in relation to one thereof, which is the first respondent’s
alleged breach
in respect of BEP Bestobel. The argument
before me proceeded on this aspect only.
[5] The applicants’ case
against the first respondent, concerning BEP Bestobel, is based
entirely and solely on
information imparted to them by Andrew
Vermaak, who is the division manager at BEP Bestobel. It is
common cause between the
parties firstly, that BEP Bestobel was
a customer of the applicants listed as such in Annexure “A”
to the order,
and secondly, that BEP Bestobel was also a
customer of the second respondent. In the founding affidavit on
behalf of the applicants,
the information disclosed to them by
Vermaak, in respect of the contact the first respondent had made with
BEP Bestobel, is
dealt with rather tersely as follows:
65.
BEP Bestobel is listed on
annexure “A” to the order.
66.
It was brought to my attention
by Andrew Vermaak, a division manager at BEP Bestobel that, also
on 18 November 2009, the first
respondent had quoted Bestobel for the
supply of SK 20 (Novatex M) material and non-asbestos boards.
67.
The applicants are the sole
South African agents and distributors of these products.
68.
It is respectfully submitted
that by doing so the first respondent is soliciting or attempting to
solicit BEP Bestobel which,
in terms of the order, he is not
allowed to do.
69.
A confirmatory affidavit by
Vermaak is annexed hereto as “FB5”
.’
[6] In the confirmatory
affidavit (Annexure FB5) Vermaak merely confirms the correctness of
the allegations made in the founding
affidavit “as far as same
relate to me”.
[7] This brings me to a point
in
limine
raised by counsel for the first respondent. It is quite
clear from simply looking at the attestation of Vermaak’s
affidavit
that the commissioner of oaths, although having signed the
attestation as such, omitted to state the place and date of the
taking
of the declaration and that he/she has failed to print his/her
full names below the signature. In addition, the blank spaces
opposite
the commissioner’s designation and area/office were
left blank. Based on these imperfections, counsel for the first
respondent
submitted that the document does not constitute an
affidavit and, accordingly, evidence under oath. Extensive reference
was made
in counsel’s heads of argument to the applicable
Regulations governing the administering of an oath, as well as s 6
of the Justices of the Peace and Commissioner of Oaths Act, 16 of
1963, as to the requirements of a valid attestation which he quite
correctly submitted were not complied with.
[8] Obviously having been
made aware of the shortcomings in the attestation of his first
affidavit, Vermaak in a further
affidavit annexed to the replying
affidavit filed on behalf of the applicants, states the following:
‘
3. I have read
the
founding and replying affidavits
deposed to by FREDERIK BOTHA
(the deponent to the affidavits on behalf of the applicants) and the
annexures thereto and confirm
the correctness thereof as far as same
relates to me and to Bestobell.’ (underlining added)
This time around the affidavit was
properly attested to and the attestation in any event has not been
attacked.
[9] In
Abromowitz v Jacquet
and Another
1950 (2) SA 247
(W) at p 251 Roper J proposed
the following three possible courses open to the court dealing with
an objection raised against
an affidavit lacking proper attestation:
‘
(1) To order that the
deponent who made the affidavit be called for oral examination, as
was done in Duke of Northumberland v Todd
(supra) (L.R., & Ch. D.
777); or
(2)
to require that the
affidavit shall be re-drawn and re-attested; or
(3)
to require that the
affidavit shall be re-attested only.’
[10] In the instant matter the
applicants have taken the initiative to rectify the imperfections of
Vermaak’s first affidavit
in his second affidavit which
effectively constitutes a re-attestation of the first affidavit. I am
unable to find fault with such
a procedure. The first respondent has
in any event dealt with the contents of Vermaak’s first
affidavit in his answering
affidavit. It is true that Vermaak’s
second affidavit was annexed to the replying affidavit to which the
first respondent
did not have a right of reply. But nothing turns on
this, no prejudice has been alleged nor was I able to find any
prejudice resulting
from this procedure. For these reasons both
affidavits deposed to by Vermaak are accepted and admitted as
evidence.
[11] Next, it is necessary to consider
the first respondent’s version concerning the contact he had
made with BEP Bestobel.
He admits having provided Vermaak with a
quotation, but adds thereto:
‘
Any contact that I
personally had with Mr Vermaak was initiated by him and I
accordingly did not “solicit” or “entice”
him
in any way.’
In elaboration hereof the first
respondent annexed a copy of a quotation from the second respondent
to BEP Bestobel, dated
2 September 2009 (
ie
prior to the
date of the order) “in response to an enquiry made by Vermaak”
.
[12] In response to the scarce
information disclosed by the first respondent, the applicants in
their reply, again through Vermaak,
refer to two further instances of
the first respondent having made contact with BEP Bestobel –
both having occurred
after the date of the order.
[13] It is not in dispute that Vermaak
and the first respondent had known one another since approximately
2007, when the first respondent
was still an employee of the second
applicant. Vermaak states that he contacted the first respondent
telephonically during July
2009 thinking that he was then still
employed at the second applicant. The first respondent did not answer
and he left a message
on his cell phone voice mail facility. The
first respondent returned the call and a meeting was arranged which
took place during
August 2009 at BEP Bestobel’s premises.
At the meeting the first respondent informed Vermaak that he was no
longer employed
by the second applicant, that he had now taken up
employment with the second respondent “but that he could
nonetheless still
do business with Vermaak and BEP Bestobel,
through his new employer”. Vermaak, who apparently had recently
acquired
first-hand practical knowledge and experience of the
consequences of a restraint of trade enforcement, “specifically
asked
the first respondent whether he was subject to a restraint of
trade”, to which he replied in the negative. On the acceptance
of this assurance, Vermaak indicated his willingness in future to do
business with the second respondent and accordingly the third
respondent. Thereafter, Vermaak states the first respondent
periodically contacted Vermaak with the request whether any business
could be done.
[14] These allegations by Vermaak, in
particular those imputing dishonesty to the first respondent, have
been left uncontroverted
by the first respondent. It is true that the
fuller and more detailed version concerning the first respondent’s
conduct is
contained in the replying affidavit on behalf of the
applicants. The first respondent, however, purposely steered clear
from any
attempt to seek leave to file a duplicating affidavit. In
argument before me, counsel for the applicants prominently referred
to
Vermaak’s unchallenged version, and almost challenged the
first respondent to provide an answer thereto. Counsel for the first
respondent prior to one of the adjournments of the court, informed
the court that he would obtain instructions from the first
respondent. Nothing came of this and the argument simply proceeded on
the merits.
[15] The significance of Vermaak’s
version is this: it effectively disposes of the first
respondent’s version
that Vermaak initiated the contact between
them, which lies at the heart of his version. This brings me to the
two quotations earlier
referred to. The first is dated 19 October
2009 (in respect of the material known as “Isoplan 1100
Millboard”,
which is a product that the second applicant at all
times supplied to BEP Bestobel) which for reasons that are not
relevant,
was not accepted by Bestobel. The second quotation was sent
on 10 November 2009, in respect of the same material. The 10 November
quotation was faxed to Vermaak together with an application for
credit facilities, which the applicants correctly submit is nothing
but an open invitation by the first respondent to Vermaak on behalf
of BEP Bestobel to apply for credit facilities with the
second
respondent and so to become its customer. The quotation was likewise
not accepted as Vermaak by then had already received
notification
from the applicants’ attorneys that the order had been granted.
[16] Against this background I turn to
the question whether the first respondent’s conduct as
described by Vermaak constituted
a breach of the order. The first
respondent in the answering affidavit submits that the order is
“vague” and “uncertain”
as to what it means.
Of critical importance is the meaning to be attributed to the words
“entice” and “solicit”
as they appear in the
order. Useful guidance as to the meaning to be attributed to the
words “soliciting” and “canvassing”
of
business are to be found in the judgment of Coetzee J (as he
then was) in
Sellers v Eliovson and Others
1985 (1) SA 263
(W). In this matter, the question the learned Judge was asked to
determine was whether an invitation by a customer of the restraint
covenantor to the restraint covenantee to submit a tender in respect
of work resorting in the category protected by the restraint,
would
fall under the restraint. The learned Judge, after an extensive and
detailed discussion of the concept of “solicit”,
with
specific reference to two New Zealand decisions, answered the
question in the negative. Concerning such a request to the person
bound by the restraint, the learned Judge reasoned as follows:
‘
It only means that he is now
being prompted to canvass or solicit business, the very thing which
he promised not to do. He should
not be led into temptation by their
blandishments, which may only serve as mitigation of his sin but not
of its expunction. If
MSD really wanted to do business with the
applicant without enticing him to commit a breach of the restraint,
they should go to
him, ask him what his price is for the job, and if
so advised, place their order at that price. Inviting him to become
one of a
number of supplicants is a different thing altogether. If he
succumbs, he as tenderor is the offeror who solicits business.
’
On this basis and at best for the
first respondent, even had he been asked by Vermaak to submit the
quotations, as he has suggested,
he would still have been in breach
of the order. On the accepted facts of this matter the first
respondent, in submitting the quotations
to Vermaak on behalf of
BEP Bestobel, in my view clearly “solicited” their
business and in particular by inviting
BEP Bestobel to avail
themselves of the second respondent’s credit facilities,
“enticed” it to become a
customer of the second
respondent.
[17] One last aspect: the first
respondent, in an attempt to place his conduct in perspective, states
that his understanding of
“entice” and “solicit”
was “that I would obtain or attempt to obtain a customer of the
second applicant
at their expense”, to which he adds, is
“something I most certainly never did”. The test
ultimately to be applied
is whether the first respondent breach was
committed “deliberately and
mala fide”
(
per
Cameron JA in
Fakie NO v CCII Systems (Pty) Ltd
[2006] ZASCA 52
;
2006 (4) SA
326
(SCA) at para
[9]
). A “genuine” albeit mistaken
belief by the first respondent that he was entitled to act as he did,
would have sufficed
to “avoid the fraction” (the words
used by Cameron JA in the paragraph referred to). I am unable to find
any of these
attributes in the first respondent’s conduct. He
was acutely aware of the order and the restriction it imposed on him
which
clearly came to the fore when he falsely assured Vermaak that
he was not bound by a restraint of trade. The first respondent’s
exculpatory conclusion I have referred to, is nothing but an
afterthought and in any event is a
non-sequitur
. It carries no
weight: on his own interpretation of the order his conduct beyond any
doubt constituted a breach thereof. He accordingly
deliberately and
with
mala fides
disobeyed the order. It follows that the
application must succeed.
[18] Counsel for the applicants, in my
view correctly so, did not persist in seeking the sanction of direct
imprisonment. A suspended
term of imprisonment, in my view, would be
appropriate in the circumstances of this case. Finally, where
dishonesty has been shown
a punitive costs order is justified.
[19] In the result I make the
following order:
1. It is declared that the first
respondent is in contempt of the order of Bregman AJ, dated 4
September 2009.
The first respondent is committed to
gaol for a period of 30 days, which is wholly suspended until 10 July
2010, on condition that
the first respondent is not again within the
period of suspension found to be in contempt of the said order.
The first respondent is ordered to pay
the costs of this application on the scale as between attorney and
own client.
FHD VAN OOSTEN
JUDGE OF THE HIGH COURT
COUNSEL
FOR THE APPLICANTS
ADV
B GILBERT
APPLICANTS’
ATTORNEYS
EVERSHEDS
COUNSEL
FOR FIRST RESPONDENT
ADV
HP v NIEUWENHUIZEN
FIRST
RESPONDENT’S ATTORNEYS
SCHOLTZ
& SCHOLTZ
DATE
OF HEARING
18
FEBRUARY 2010
DATE
OF JUDGMENT
26
FEBRUARY 2010