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[2010] ZAGPJHC 92
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Document Warehouse (Pty) Limited v Truebody and Another (2010/26977) [2010] ZAGPJHC 92 (13 October 2010)

REPORTABLE
SOUTH
GAUTENG HIGH COURT, JOHANNESBURG
CASE NO
:
2010/26977
DATE:
13/10/2010
In the matter between:
THE
DOCUMENT WAREHOUSE (PTY) LIMITED
Applicant
and
KAREN
LOUISE TRUEBODY
First Respondent
METRO FILE
LIMITED
Second Respondent
J U D G M E N T
SALDULKER, J
:
INTRODUCTION
[1]
In
South Africa’s growing economy, the question of the
enforceability of restraint of trade clauses is a fertile ground for

litigation, both for employers and employees.
[2]
In
this application, the applicant seeks an interdict to enforce the
provisions of a restraint of trade agreement concluded between
the
first respondent, Karen Louise Truebody (Truebody) and Document
Warehouse (the applicant). The second respondent (Metro File)
is
cited in these proceedings insofar as it may have a direct and
substantial interest in the outcome.
BACKGROUND
[3
]
Ms Truebody was employed by the applicant from August 1999 until May
2010. Initially, she was employed as the applicant’s
Operations
Manager. During 2004 Truebody was promoted to Sales and Marketing
Director. Towards the end of her employment with the
applicant, she
was also involved in Human Resources tasks.
[4
]
Some two years into her employment, in 2001, a service and restraint
of trade agreement (restraint) was entered into between
the applicant
and Truebody. The restraint was for a period of 36 months.
1
On 31 May 2010 Truebody was dismissed from the employment of the
applicant. At that stage she was the applicant’s Director
of
Marketing, Sales and Human Resources. On 1 July 2010, Truebody
entered the employment of the second respondent, (Metro File),
a
competitor, as its Sales and Service Manager and is presently so
employed.
[5
]
The relevant clauses of the restraint which Truebody agreed to,
recorded
inter
alia
that:
5.1 during the course of her
employment with the Applicant, Truebody has
acquired/will acquire
considerable know-how in and will learn of the
Applicant’s
techniques relating to its business;
5.2 she will have access to
the names of clients with whom the Applicant
does business whether
embodied in written form or otherwise;
5.3 she will have the
opportunity of forging personal links with clients of the
Applicant;
5.4 she will have the
opportunity of learning and acquiring the trade secrets, business
connections and other confidential information
pertaining to the
Applicant’s business;
5.5 she acknowledged that the
only effective and reasonable manner in
which the Applicant’s
rights in respect of its business secrets and client
connection can be protected is by
means of a restraint of trade covenant imposed on her;
5.6 she undertakes that neither
she nor any company, close corporation, firm, undertaking or concern
in which she is directly or
indirectly interested or by which she is
employed whether alone or jointly-
5.6.1 will for a period of 36
months after the termination of her employment with the Applicant, be
interested or engaged, directly
or indirectly, in any capacity
(including but not limited to advisor, agent, consultant, director,
employee, financier, manager,
member of a close corporation, member
of a voluntary association, partner, proprietor, shareholder,
trustee)
in any entity directly or indirectly that competed
with the Applicant in the Republic of South Africa;
(my
emphasis
)
5.6.2 at any time
disclose any confidential information
2
other than to entities or persons connected with the company which
are entitled to know such confidential information;
5.7 during the restraint period
she will not solicit orders from the Applicant’s customers or
canvass business from the
Applicant’s customers or sell or
supply goods to the Applicant’s customers or render services to
the Applicant’s
customers;
5.8 the restraint was reasonable
as to subject matter, period and territory.
[
6]
The applicant conducts business as a document archiving and offsite
storage facility. Essentially, it contracts with customers
to store
for varying fixed periods their documentary records, which are placed
for safekeeping in designated storage containers
in offsite storage
facilities. The details of each file provided by their customers are
captured on the applicant’s computer
database. According to the
applicant, it enjoys both national and international representation
and has storage facilities in Johannesburg,
Cape Town,
Pietermaritzburg, Durban, Port Elizabeth, Pretoria, Namibia and
Ghana.
[
7]
Metro File is a dominant firm within the meaning of Section 7 of the
Competition Act,
3
and is the market leader in information and records management. It is
a large company having many branches in South Africa and
the
applicant’s main competitor in the document filing industry.
PRINCIPAL SUBMISSIONS
[8
]
It is common cause that the applicant and Metro File are direct
competitors in the document filing industry. It is common cause
that
Truebody was, up to May 2010 employed by the applicant as its Sales,
Marketing and Human Resources Manager and is presently
employed in
the same industry by Metro File, as its Sales and Service Manager.
According to the applicant, the nature of Truebody’s
employment
with Metro File, is in breach of the restraint which she voluntarily
entered into with the applicant.
[9
]
The applicant has relied on both its customer connection and
confidential information to enforce the restraint against Truebody.

The applicant contends that its business is now vulnerable and at
risk, as Truebody is armed with confidential business secrets
which
she acquired at the applicant’s business and which she is
potentially capable of exploiting at her new place of employment,

Metro File, a direct competitor, in flagrant disregard of her
restraint covenant. Truebody’s employment with Metro File,
is
prejudicial to the rights that the applicant sought to protect by the
conclusion of the restraint, which prejudice increases
exponentially
each day that Truebody is employed by Metro File.
[10
]
Truebody’s contention in essence is that the applicant is
unlawfully seeking to prevent her from being employed and to
deny her
the right to earn a living, its sole purpose aimed at restricting
fair competition. The fact that she agreed in 2001,
when she
concluded the restraint, that its terms were reasonable, was not a
determining factor. Truebody asserts that the express
terms of the
restraint are invalid as they contain restrictive conditions which
are, in her belief,
contra
bonos mores
,
unfair, unlawful and unenforceable. She contends that the terms of
the restraint are excessive, being cast in the
‘widest
possible terms’
,
for a period of 36 months within the geographical area of the whole
of the Republic of South Africa, and that she is being restrained

from using her own managerial and sales skills, normally associated
with a sales and marketing employee, which skill, knowledge
and
experience she acquired through her own hard work and dedication. She
contends that these skills were developed at Avis where
she worked as
a rental sales agent prior to her employment with the applicant.
[11
]
According to Truebody, the applicant does not enjoy any protectable
interests in the form of confidential information and customer

connection. The products, services and assistance provided by the
applicant to its customers are neither unique nor confidential,
and
the applicant’s reliance on the ‘springboarding’
doctrine,
4
is misplaced.
5
Truebody thus has the onus of showing that the applicant has no
protectable business secrets and that therefore the enforcement
of
the restraint is not reasonable.
6
[12
]
Additionally, Truebody contends that her dismissal from the
applicant’s employment is procedurally and substantially unfair

as it involved bad faith on the part of the applicant and that on
this ground alone the restraint should not be enforced.
[13] It is
common cause that this labour dispute forms the subject-matter of a
referral presently pending at the CCMA.
7
In my view it is not necessary in this application to traverse the
merits of Truebody’s dismissal as it is a matter pending
in
another forum.
[
14]
In her papers, Truebody undertakes not to divulge the applicant’s
trade secrets and contends that it is therefore unnecessary
and
unreasonable to enforce the restraint.
[15
]
The applicant bears the
onus
of proof to show that it has a protectable interest, deserving of
protection in enforcing the restraint of trade agreement entered
into
between Truebody and itself and that the present employment that
Truebody is engaged in, falls within the ambit of the terms
of the
restraint.
THE LAW
[16
]
The decision in
Magna
Alloys & Research (SA) (Pty) Ltd v Ellis
8
brought about a significant change to the approach by the courts in
regard to restraint of trade agreements. It recognised that
restraint
of trade agreements are valid and enforceable and should be honoured
unless they unreasonably restrict a person’s
right to trade or
work and are in conflict with s 22 of the Constitution, Act 108 of
1996, which recognises the right of every
citizen to choose his or
her occupation, trade or profession freely.
[17
]
In a number of decisions the legal principles governing unlawful
competition have been elaborated upon.
9
Depending upon the particular form the complaint of unlawful
competition takes, the principles enunciated in the cases that have

come before the courts provide an illuminating guide in determining
the question of unlawfulness.
[
18]
The law recognises the right to trade freely, but this freedom is
clearly not unfettered.
10
A
balance has to be struck between the obligations of contracting
parties to honour their contracts entered into by them and the
right
of the individual to trade and to practice his chosen profession
freely.
[19]
The Supreme Court of Appeal in
Reddy
v Siemens Telecommunications (Pty) Ltd
11
held as follows:
“…
all
persons should in the interests of society be productive and be
permitted to engage in trade and commerce or the professions.
Both
considerations reflect not only common-law but also constitutional
values. Contractual autonomy is part of freedom informing
the
constitutional value of dignity, and it is by
entering
into contracts that an individual takes part in economic life. …
……
.A
restraint would be unenforceable if it prevents a party after
termination of his or her
employment
from partaking in trade or commerce without a corresponding interest
of the other party deserving of protection. Such
a restraint is not
in the public interest.”
[20
]
Malan AJA, writing for the court in
Reddy
remarked
that a court must make a value judgment in determining the
reasonableness of a restraint. Two principal considerations
come into
play: the first is public interest and the second is the right to
engage in trade, commerce or a particular profession.
[21
]
The reality of the situation is that an employee who intends to use
his ex-employer’s confidential information will not
do so
overtly as he does not want to be ’caught out’, to put it
colloquially, by his erstwhile employer. Thus, in order
to claim an
infringement of its proprietary interests an employer need only prove
that its erstwhile employee is potentially able
to exploit its
confidential information or customer connection in his or her new
employment. It will be sufficient to create the
real probability that
the employee will consciously or unconsciously do so in the new
employment, because of the loyalty he owes
to his new employer. As
was stated by Malan AJA in
Reddy
12
:
‘
Reddy
is in possession of confidential information in respect of which the
risk of disclosure by his employment with a competitor,
assessed
objectively, is obvious. It is not that the mere possession of
knowledge is sufficient, and this is not what was suggested
by Marais
J in BHT Water. Reddy will be employed by Ericsson, ‘a concern
which carries on the same business as [Siemens]’in
a position
similar to the one occupied with Siemens. His loyalty will be to his
new employers and the opportunity to disclose confidential

information at his disposal, whether deliberately or not, will exist.
The restraint was intended to relieve Siemens precisely of
this risk
of disclosure’.
[22
]
Courts will not be reluctant to enforce the provisions of a
restraint of trade agreement entered into by parties, where the
terms
are reasonable and not against public policy. ‘Public policy
requires contracts to be enforced.’
13
In
Reddy
,
Malan AJA agreed with the following observations by Lord Denning MR,
in
The
Littlewoods
Organisation Ltd v Harris
14
:
'It is thus established that an
employer can stipulate for protection against having his confidential
information passed on to a
rival in trade. But experience has shown
that it is not satisfactory to have simply a covenant against
disclosing confidential
information. The reason is because it is so
difficult to draw the line between information which is confidential
and information
which is not; and it is very difficult to prove a
breach when the information is of such a character that a servant can
carry it
away in his head. The difficulties are such that the only
practical solution is to take a covenant from the servant by which he

is not to go to work for a rival in trade. Such a covenant may well
be held to be reasonable if limited to a short period.'
[23
]
For the applicant to succeed it must establish that its alleged
trade secrets and confidential information or proprietary interests

justify protection by the said restraint. If the employer has no
proprietary right, the restraint is regarded as being unreasonable

and contrary to public policy, serving only to prevent competition.
15
[2
4]
In
Basson
v Chilwan & Others,
16
the court held that the reasonableness or otherwise of a restraint is
determined with reference to the following four considerations:
24
.1.
Is there an interest deserving of protection at the termination of
the agreement?
24.2.
Is that interest being prejudiced?
24
.3.
If so, how does that interest weigh up qualitatively and
quantitatively against the interest of the other party not to be
economically inactive and unproductive?
24
.4.
Is there another facet of public policy not having anything to do
with the relationship between the parties which requires
that the
restraint should either be enforced or disallowed?
[25
]
The proprietary interests that are recognised by the courts as being
worthy of protection are trade connections and confidential

information.
17
To qualify as confidential information the information must comply
with three requirements:
18
It must
involve and be capable of application in trade or industry;
that is: it must be useful.
It must not be public knowledge and public property, that is
objectively determined it must be known only to a restricted number

of people or to a close circle.
The information objectively determined must be of economic value to
the person seeking to protect it.
[26
]
An employer has an interest in enforcing the restraint of trade
agreement concluded with its employee to protect its confidential

information. Confidential information includes pricing strategies,
knowledge of business conditions and customer relationships.
It also
includes customer lists, information about business opportunities
available to the employer and confidential information
received by an
employee during her tenure of employment.
19
[27]
Where
it is clear that the employee will, upon termination of his/her
employment, be in a position to induce customers with whom
a close
relationship was built, to follow the employee to his new place of
employment, an employer will have an interest in enforcing
the
restraint. It was clearly recognised in
Rawlins
and another v Caravantruck (Pty) Ltd
20
that customer goodwill can be established or enhanced in favour of an
employer over customers previously known to an employee.
Where an
employee has had access to an employer’s customers and is in a
position to build up a particular relationship with
them, so that
when he leaves an employer’s service he could easily influence
them to follow him, there appears to be no reason
why a restraint to
protect the employer’s customer connections should not be
enforced.
21
TRUEBODY’S
EMPLOYMENT WITH THE APPLICANT
[28
]
It is not disputed that Truebody who was employed by the applicant
for more than a decade, nurtured strong ties with the applicant’s

customers and developed a good rapport with them, as part of her
sales function. She regularly called on them and entertained them
at
the applicant’s expense.
[29]
Through
this constant and consistent interaction, she forged personal links
with them, gained an intimate knowledge of their requirements.

Truebody became aware of their special storage needs and acquired
peculiar knowledge of the terms and conditions of the service

agreements between the applicant and its customers, particularly its
key customers. The service agreements were specifically tailored
to
suit the customer’s needs in relation to the pricing and
discounting structures. Truebody was aware of which contracts
had
already expired, which had not been renewed and continued on a month
to month basis. It is obvious that, as a sales director,
she would
have learnt the identity of the decision–makers at each
customer of the applicant, and developed relationships
with the role
players.
[30]
Truebody was involved in the formulation of quotes and pricing
structures. According to the applicant, the method employed
for the
latter was unique and highly confidential. The applicant’s
assertions that this places Truebody in a unique position
‘to
easily induce customers’ of the applicant to migrate their
business to Metro File and that ‘this invaluable
springboard
into the applicant’s market share is not one that Metro File
would ordinarily have were it not for their employment
of Truebody’
,
has merit.
[31
]
The applicant’s fears that armed with all this highly
confidential information in regard to its customer connections and

its business strategies, Truebody would know when to approach a
particular customer with a view to securing that customer’s

work, and place the business of the applicant at risk, are well
founded. Truebody’s contention that she is ‘confined

regarding pricing and discounts that she may offer to respondent’s
customers’
,
at
Metro File and that the fears of the applicant are unfounded, is
clearly fallacious. In my view, it is a deliberate attempt to

downplay her involvement in the pricing structures at a competitor
and to reassure the applicant that, despite her knowledge
of the
applicant’s unique pricing structures, which is of economic
value to it, she has no intention to ‘solicit any
work from the
applicant’s customers or to canvass business from the
applicant’s customers’
.
As part of her sales functions, it is obvious that Truebody would
have become aware of the prices being paid by particular customers
of
the applicant, the nature of its confidential costing structures and
its mark-up processes and the discounts being offered to
them.
[32
]
According to the applicant, its unique business approach extended to
the quoting and bidding for tenders. It is not disputed
that Truebody
assisted and spearheaded some of the tenders submitted on its behalf.
Early in 2010, Truebody presented the applicant’s
tender to a
prospective client in Ghana. Truebody would have acquired knowledge
of the financial status of the applicant during
the tender processes
as the tender documents included the applicant’s financial and
audited statements.
[33
]
In her role as a director, at executive board meetings, she would
have been privy to confidential information which was not in
the
public domain and restricted to a select few, concerning the
applicant’s business, its trade secrets, its confidential

future financial plans and the resources available to the applicant
for its international expansion plans.
[34]
It is not disputed that Truebody was involved in submitting
proposals on behalf of the applicant to the South African Police

Forensic Laboratory (SAP) for the storage of the documents and
forensic evidence. The SAP has called for tenders for its storage

requirements and it is not disputed that Metro File a market leader
in information and records management and the dominant firm
in the
document storage industry might ‘tender for the storage of the
SAP’s documents and forensic evidence’,
The applicant
asserts that Truebody is armed with the knowledge of the applicant’s
confidential methodologies and processes
disclosed to her ‘during
her previous pitch to the SAP’
,
and
Metro File, its competitor, having Truebody in its employment, is
now in a unique and advantageous position to gear its proposal
to the
SAP.
[35
]
Metro File is currently responsible for storing CIPRO's documents, a
tender that was awarded to it three years ago, at a time
when
Truebody was responsible for the preparation and submission of the
applicant’s tender. The applicant fears that as the
CIPRO
tender is presently up for renewal, that ‘with the knowledge
that Truebody has gained of the applicant’s business
and armed
with all the confidential information disclosed to her in her
fiduciary capacity as director and employee of the applicant,
the
second respondent is now uniquely placed to gear its tender with
regard to the potential offering that the applicant can make
to
CIPRO.’
[36
]
In my view the employment of Truebody, who has
‘insider’
information in regard to the applicant’s business methods,
including its ‘tender’ business will enhance Metro
File’s
business to the disadvantage of the applicant. The tender business is
a substantial component of the applicant’s
revenue and it would
be prejudicial to the applicant if its business could not continue
without this revenue. Clearly Truebody’s
employment will serve
as a ’springboard’ for Metro File, as it will benefit
from the ‘
fruits
of another’s labour
’
22
,
thus securing for itself a competitive edge, and will perpetuate its
dominance in the industry. According to the applicant, there
is a
grave risk of potential loss and damage to the applicant if Truebody
continues to breach the restraint. The SAP and CIPRO
tenders alone
amount to R35 million.
[37] There
has been no effective rebuttal of the applicant’s claims that
Truebody was involved in and well-trained in conducting
tenders in
the applicant’s unique manner and style, both locally and
internationally, and that armed with the applicant’s
unique
approach, will now place the applicant’s business at risk.
[38
]
It is not disputed that during her employment Truebody had
unrestricted access to the applicant’s server by means of a

laptop which contained all the applicant’s confidential
information. It is also not disputed Truebody had access to the
debtor’s lists which is a list of active customers and that
prior to leaving the applicant’s employment Truebody e-mailed

to her private e-mail address being mrsafrica@gmail.co, (according to
the applicant Truebody is/was the reigning Mrs Africa), contact

details of some of the applicant’s customers. In my view,
Truebody’s submission that ‘it is impossible for me
to
remember the details contained in any such lists and that the detail
that I may remember cannot just be deleted from my memory.
I will,
however, not disclose any detail that I may remember from time to
time to my new employer, since there is no need to do
so, neither
have I been requested by the Second respondent to disclose such
information’,
is
not an undertaking that the applicant can be expected to rely upon.
[39] The
applicant should not have to accept the Truebody’s
ipse
dixit
that she has not or will not disclose the content of the lists to any
third party. The applicant correctly asserts that this constitutes

evidence that she has appropriated to herself details of the
applicant’s customer connections which she is now in a position

to disclose and use to her advantage in her employment with Metro
File.
[40
]
Truebody built up a longstanding relationship with the applicant’s
customers over a number of years and personally interacted
with them.
Her new employment with a competitor, constitutes a threat to the
applicant’s commercial viability as she is armed
with
confidential information relating to the applicant’s business
operations, its costing structures and the mark-up processes
and its
international expansion plans
[41] Truebody
has attempted to defeat the relief sought by the applicant by
offering an undertaking not to disclose any confidential
information
to Metro File and tenders not to contact any of the applicant’s
customers even though she disputes the validity
and enforceability of
the restraint. In my view Truebody is an ex-employee of a direct
competitor who bound herself to the terms
of the restraint. The
applicant has a real, substantial and proprietary interest in the
enforcement of the restraint.
[42]
Truebody’s assertion that it did not follow, that she would,
in her new employment, use the knowledge she gained of
the
applicant’s business to the detriment of the applicant, and her
formal undertaking not to do so, is in my view, a tacit
concession on
the part of Truebody that the applicant has proprietary rights worthy
of protection.
[43]
Furthermore, her undertaking is contrary to the terms of the agreed
restraint. She is employed with a direct competitor, who according
to
her is ‘well structured’ and is not in need of a
‘springboard’ as its ‘business is light years
ahead
of the applicant’s in sheer size, products and services
offered, geographical distribution, etc’; and ‘the

applicant is not even remotely in the same league as the second
respondent comparing the size of the two entities’. This

description of a competitor’s business by an ex-employee in my
view strengthens the applicant’s case that Truebody’s

continued employment with Metro File, is prejudicial to the
applicant, and is in breach of the restraint entered into by her

and the applicant is entitled to seek the full enforcement of its
‘
contractual
pound of flesh
’.
23
ASSESSMENT
[44
]
Truebody has been unable to seriously or effectively deny that she
gained an intimate knowledge of and insight into the applicant’s

business, its methodologies and its operations. The facts concerning
the relationship between Truebody and the applicant’s
customers
are largely uncontested and thus the existence of the applicant’s
proprietary interest in my view is not in dispute.
[45
]
It is not disputed that, initially, Truebody was employed as the
applicant’s Operations Manager. After her promotion in
2004 she
was the director responsible nationally for the applicant’s
marketing and sales. Although there was a question
mark as to the
confidentiality of the applicant’s business, Truebody conceded
that she attended director’s meetings
where matters relating to
the applicant’s business were discussed. She admitted that she
made business presentations on behalf
of the applicant in Ghana,
Namibia and Botswana. Whether in her duties as Operations Manager,
or in Sales, Marketing or Human
Resources, Truebody was a director of
the applicant and would have acquired knowledge of the applicant’s
business secrets,
its marketing strategies, including its
confidential methodologies in providing goods and services to its
customers, which were
unique and distinguishable from the services
provided by other competitors. It is obvious that Truebody would have
acquired knowledge
of the applicant’s “filerite”
software system, in the course of her duties with the applicant.
[
46]
In terms of the restraint, Truebody acknowledged that she would
learn the applicant’s techniques, its trade secrets,
business
connections and other confidential information of the applicant and
that ‘the only effective and reasonable manner
in which the
company’s rights in respect of its business secrets and client
connection can be protected is the restraint
imposed’ on her.
More importantly, Truebody agreed that the restraint was reasonable
and that she would not for a period
of 36 months after her
termination of her employment with the applicant become ‘interested
or engaged in any capacity with
any entity that competed with the
applicant’. Initially, she was restrained from being employed
at a competitor for a period
of three years within the geographical
area of the whole of the Republic of South Africa. This has been
reduced to a period of
24 months in this application.
[
47]
The territorial reasonableness of a restraint is determined with
reference to whether or not it is necessary to protect a legitimate

interest of the applicant.
24
The applicant has demonstrated in these papers that it has
legitimate business interests in the areas that it seeks to restrain

the first respondent. Both the applicant and Metro File have many
branches in South Africa. In my view the period of the restraint
as
well as the geographical area are reasonable. The fact that the
applicant has been willing to reduce the restraint period from
three
years to two years does not affect its enforceability. In this
application however, other than her bald
ipse
dixit
that the period is excessive and unreasonable, Truebody makes out no
case for such assertions.
[48
]
It is common cause that Truebody was dismissed from the applicant’s
employ after a disciplinary enquiry. In my view her
dismissal does
not influence the enforcement of the restraint. She is to be held to
its terms that ‘the termination of the
employee’s
employment for any reason whatsoever shall not affect the operation
of any provisions of this agreement’
25
.
[49
]
An employer is in an invidious position after an employee with whom
he had a restraint agreement becomes employed with a direct

competitor. At best for the employer, it has to show that there is
confidential information, which an ex-employee acquired through
her
employment and which she could disclose to the applicant’s
direct competitor should she choose to do so. However, the
applicant
should not have to content itself with crossing its fingers
26
and hope that Truebody would act honourably or abide by the
undertakings she has given.
[50
] The
applicant cannot police the undertaking given by Truebody. The
applicant contracted with Truebody to restrain her on the termination

of her employment so that it would not have to rely on Truebody’s
honesty in policing rights which it sought to protect.
[51
]
It is virtually impossible for the applicant to know or prove what
information Truebody could make available to Metro File or
has
already made available. Truebody cannot just delete the names of the
applicant’s customers and debtors from her memory.
27
All that the applicant can do, is to show that there are trade
secrets which Truebody had access to and acquired as a result of
her
position, function and exposure to the applicant’s confidential
information and customer connection during her employment
with the
applicant and which she could transmit to the second respondent
should she choose to do so, and which, in my view the
applicant has
done. As was stated by Marais J, in
BHT
Water Treatment (Pty) Ltd v Leslie & another
28
:
‘
In
my view, all that the applicant can do is to show that there is
secret information to which the respondent had access, and which
in
theory the first respondent could transmit to the second respondent
should he
desire
to
do so. The very purpose of the restraint agreement was that the
applicant did not wish to have to rely on the
bona
fides
or
lack of retained knowledge on the part of the first respondent, of
the secret formulae. In my view, it cannot be unreasonable
for the
applicant in these circumstances to enforce the bargain it has
exacted to protect itself.
Indeed,
the very
ratio
underlying
the bargain was that the applicant should not have to content itself
with crossing its fingers and hoping that the first
respondent would
act honourably or abide by the undertakings that he has given.
In
my view, an ex-employee bound by a restraint, the purpose of which is
to protect the existing confidential information of his
former
employer, cannot defeat an application to enforce such a restraint by
giving an
undertaking
that he will not divulge the information if he is allowed, contrary
to the restraint, to enter the employment of a competitor
of the
applicant. Nor, in my view, can the ex-employee defeat the restraint
by saying that he does not remember the confidential
information to
which it is common cause that he has had access. This would be the
more so where the ex-employee, as is the case
here, has already
breached the terms of the restraint by entering the service of a
competitor’.
[52]
On her own version, Truebody concedes being employed by the second
respondent, a direct competitor. Thus she is in breach
of her
restraint. She is clearly using skills, knowledge and experience
acquired after having been employed for 11 years with the
applicant
in the same industry. The restraint must therefore apply as she is
engaged in activities of the kind that she performed
whilst employed
with the applicant. The two companies are direct competitors. Clearly
Truebody’s employment with the second
respondent as its sales
and service manager, is of the nature contemplated by the restraint
of trade agreement signed by her.
[53
]
At the centre of Truebody’s contentions, is her right to be
employed and to earn a living. According to her, the enforcement
of
the restraint of trade agreement, by the applicant, is directed
solely at the restriction of fair competition. Truebody’s

assertions that ‘it is unreasonable’ and ‘against
public policy’
to
prohibit a person to work in the entire area of the Republic of South
Africa
,
especially
having regard to the nature of the industry and my field of
expertise’ is without merit. By making the submission
that ‘I
was employed for a period of 11 years in the industry and this is
what I do best’ , is in my view a direct
recognition of the
considerable ‘know-how’ she acquired of the document
filing industry, in the course of her duties
in the applicant’s
business since her employment in 1999.
[54] The
right of a person to engage in economic activity is entrenched in the
Constitution. This does not mean that this right
is unfettered. An
ex-employee should be held to the terms of a fair, enforceable and
reasonable restraint agreement which she voluntarily
entered into.
Truebody should be held to the terms of the restraint.
[55
]
Importantly, Truebody voluntarily concluded the restraint limiting
her choice of employer. The restraint thus places a limit
on Truebody
from being employed by a competitor, restricted to a period of 24
months. This is a short period and reasonably necessary
for the
legitimate protection of the applicant’s proprietary interest.
Thus, Truebody is restrained in her choice of employer
for a limited
period and not from her being economically active at all.
[56
]
The applicant does not seek to prevent Truebody from working in the
Republic of South Africa and participating in the economic
sphere.
Truebody is free to use her sales and managerial skills which are
necessarily ‘a part of herself’,
29
in any industry that does not compete with the applicant. As has
been stated by the applicant in its papers, it
‘does
not seek to prevent Truebody from using her managerial and sales
skills. It merely seeks to prevent Truebody from being
employed in
competition with the Applicant for a period of 2 years.’…
‘After the restraint period of two years
Truebody is free to be
employed with whomsoever she pleases.’
The
applicant merely seeks to protect its proprietary rights by enforcing
the terms of the restraint
.
Restraining
her from being employed at Metro File or any other competitor does
not in my view affect her employment elsewhere. The
nature and the
extent of her employment in terms of the restraint is clearly
restricted only to a direct competitor, of which there
are many, and
MetroFile, a large company with many branches in the Republic of
South Africa, including Johannesburg where Truebody
is employed,
falls into that category.
[57
]
In my view the applicant has demonstrated that Truebody is in
possession of trade secrets and confidential information of the

applicant, having been employed for more than a decade with the
applicant, and that during her employment, she acquired the
‘know-how’
of the applicant’s business processes,
methodologies and customer connections and she is in possession of
confidential information
of the applicant’s business in respect
of which the risk of disclosure is obvious. The possibility that she
may disclose
confidential information to a competitor deliberately or
not cannot be ruled out. The whole purpose of the restraint was
intended
to relieve the applicant precisely of this risk of
disclosure.
THE URGENT APPLICATION
[58
]
On Monday 5 July 2010, the applicant discovered that Truebody had
taken up employment with the Second Respondent. A letter
was written
to her calling upon her to terminate her employment with the second
respondent. A meeting was held with her attorneys
in an attempt to
settle the matter but to no avail. The urgent papers were prepared
and issued and served on 13 July 2010. The
matter was then set down
for hearing on 20 July 2010, after giving the parties time to file
their respective affidavits. However,
it appears that after it was
suggested by Coppin J in front of whom the matter came, that the
court roll was extremely busy and
that there was a possibility that
he may not get to the matter that week, the parties agreed to the
postponement of the matter
to the opposed motion roll of 27 July
2010. In my view the applicant did not delay in bringing these
proceedings and acted expeditiously
in doing so. In these
circumstances it should be entitled to the costs of the hearing of 20
July 2010.
CONCLUSION
[59
]
In my view Truebody has not effectively rebutted the applicant’s
claims that there are protectable interests. I am of
the view that
the admitted facts.
30
averred by the applicant taken with the first respondent’s
facts are such that, not only has Truebody not discharged the
onus of
showing that there is no protectable interest in respect of the
applicant’s trade secrets in the form of its customer

connection and confidential information, but in fact the applicant
has clearly demonstrated on the papers before me that it has

protectable trade secrets which are protectable by means of the
restraint of trade agreement. That this is so, is also underlined
by
the restraint signed by Truebody.
[6
0]
In my view the requirements of a final interdict have been met. The
applicant has shown that it has a clear right which has
been
breached. Without an interdict the applicant will have its
proprietary rights prejudiced by Truebody’s employment with

Metro File. There is no other satisfactory remedy available to it in
order to enforce its rights. In my view a claim for damages
would not
be an adequate alternative remedy in this case, as the quantum of
damages suffered would be difficult to determine and
not put an end
to the continued employment of Truebody with a competitor. The
prejudice to the applicant’s proprietary rights
increases
exponentially on a daily basis for as long as Truebody remains
employed with Metro File. It will be impossible for the
applicant to
police Truebody’s conduct and for that reason it is vital that
her employment with Metro File be immediately
terminated.
[61
] The
applicant is entitled to protect its proprietary rights evidenced by
its confidential information and customer connection,
by enforcing
the provisions of the restraint that Truebody signed, voluntarily and
in the exercise of her freedom to contract.
The applicant’s
right to enforce the restraint is clear. The restraint is fair,
reasonable and enforceable. It is not against
public policy. Truebody
must be held to her contractual undertaking.
[62] In the
result the following order is made:
62.1
The
Applicant’s non-compliance with the Rules of Court relating to
service under the time periods prescribed by the Rules
of the above
Honourable Court is condoned.
62.2 The First
Respondent is interdicted, whether personally or through any company,
close corporation, firm, undertaking or concern
in which she is
directly or indirectly interested or by which she may be employed
whether alone or jointly for a period of 24 months
calculated from 31
May 2010 from being interested or engaged, directly or indirectly, in
any capacity (including but not limited
to adviser, agent,
consultant, director, employee, financier, manager, member of a close
corporation, member of a voluntary association,
partner, proprietor,
shareholder, trustee) in any entity that competes with the Applicant
in the Republic of South Africa.
62.3 The
Second Respondent is directed to terminate the First Respondent’s
employment with it.
62.4 The First
Respondent is directed to pay the costs of this application,
including the costs of 20 July 2010.
___________________________
H
SALDULKER
JUDGE OF THE SOUTH GAUTENG
HIGH COURT, JOHANNESBURG
DATE OF HEARING
….................................
30
JULY 2010
DATE OF JUDGMENT 13 OCTOBER 2010
COUNSEL FOR
APPLICANT
ADV
PYE
INSTRUCTED BY MICHAEL TYMVIOS ATTORNEYS
COUNSEL FOR
RESPONDENT
ADV
BEKKER
INSTRUCTED BY DUVENAGE ATTORNEYS
1
In
this application the applicant seeks to restrain the first
respondent for a period of 24 months.
2
Confidential information is defined in the restraint as follows:
‘
1.2.5
confidential information’’includes,but is not limited
to;
1.2.5.1
any information in respect of know-how, formulae, processes systems,
business methods,markerting methods, promotional
plans, financial
models,inventions,long-term plans and any other information of the
company, in whatever form it may be;
1.2.5.2
all internal control systems of the company;
1.2.5.3
details of the company’s financial structure and opening
results;
1.2.5.4
the contractual and financial arrangements between the company and
others with whom it has business arrangements of whatsoever
nature;
and
1.2.5.5
all other matters which relate to the company which are of
confidential nature, and which are not in the public domain;
3
Act no
89 of 1998
4
In its
founding papers the applicant states: “This invaluable
springboard into the Applicant’s market share is not
one that
Metro File would ordinarily have were it not for their employment of
Truebody’.
5
The concept
of springboarding was set out in
Waste
Products Utilisation (Pty) Ltd v Wilkes & another
2003(2)
SA 515, at p 582,F to J , where Lewis J stated as
follows:”Springboarding’ entails not starting at the
beginning
in developing a technique .. but using as a starting point
the fruits of someone else’s labour’.
6
Reddy
v Siemens Telecommunications (Pty)Ltd
2007(2)
SA 486 (SCA) at p493, para [10];p495, para[14].
7
Commission
for Conciliation, Mediation and Arbitration
8
1984(4)
SA 874 (A)
9
Waste Products ,
at 570 , F to J;See also:
Nampesca
(SA) Products (Pty) Ltd & another v Zaderer & Others
1999 (1) SA 886
(C ) at 894;
Da
Silva & Others v CH Chemicals (Pty) Ltd
[2008] ZASCA 110
;
2008 (6) SA 620
at 627
10
G A Fichardt Ltd v
The Friend Newspapers Ltd
1916 AD 1
, Innes CJ at 6;
Matthews
and Others v Young
1922
AD 492
De Villiers JA at 507; See also :
Sunshine
Records (Pty) Ltd v Frohling & others
1990
(4) SA 782(A)
11
2007(2) SA 486 (SCA), at p 496para [15]; p497,para [16]
12
Reddy
,
p 499,para[20]F to H
13
Reddy
,p
500, para[21]; See
also:
Knox D’Arcy Ltd and another v Shaw and another 1996(2) SA 651
(W)
14
[1978] 1 ALL ER 1026
(CA) at 1033 c-d.
15
Automotive
Tooling Systems (Pty) Ltd v Wilkens & Others
2007 (2) SA 271
(SCA) at 281 B to D;
16
1993(3)
SA 742(A),at 767G to H; See also
Kwik
Kopy (SA) (Pty) Ltd v Van Haarlem and another
1999
(1) SA 472(W)
17
Rawlins
& another v Caravantruck (Pty) Ltd
1993(1) SA 537 (A);
Meter
Systems Holdings Ltd v Venter & another
1993 (1) SA 409
(W)
18
Advtec
Resourcing (Pty) Ltd v Kuhn
2007(4) ALL SA 1386 ,C para51
19
Basson
v Chilwan, p767; Dickenson Holdings Group (Pty) Ltd v Du Plessis
2008 (4) SA 214
20
1993(1)
SA 537 (A) at 542 E to H;
Nampesca,
p899;
Hirt
& Carter (Pty) Ltd v Mansfield
&
Another
[2008] 3 SA 512
(D) para [37];
David
Crouch Marketing CC v Du Plessis
(2009) 30 ILJ 1828 (LC),p1839,para[22]
21
Paragon
Business Forms (Pty) Ltd v Du Preez
1994(1) SA 434(SE) at 444 A to C;
Turner
Morris,(Pty) Ltd v Riddell
1996
(4) SA 397
(E)at 408I to 409G.
22
Waste
Products,p582,F to J
23
BHT Water , p54
24
Nampesca,
p 897;
Weinberg
v Mervis
1953(3) SA 863(C);
Turner
Morris (Pty) Ltd v Riddell
1996(4)
SA 397 (E) at 406 C to D
25
Reeves
v Marfield Insurance Brokers CC
[1996] ZASCA 39
;
1996 (3) SA 766
(A), p 771I/J to 772B
26
BHT
Water Treatment
1993
(1) SA 47(W)
,at 58
27
Meter
System Holdings Ltd v Venter & another 1993(1) SA 409 (W) , at
428 D to F.
28
BHT Water,p58
29
Aranda
Textile Mills (Pty) Ltd v Hurn and Another
[2000] 4 ALL SA 183(E)
at para33;
Automotive
Tooling Systems (pty) Ltd v Wilkins and Others
2007(2) SA 271 (SCA) at 279
30
Plascon
Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984(3) SA 623 A
.