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[2010] ZAECPEHC 23
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MMA Security Services CC t/a Broubart Security and Another v Callanan and Another (495/10) [2010] ZAECPEHC 23 (31 May 2010)
IN THE HIGH COURT OF SOUTH AFRICA
REPORTABLE
(EASTERN
CAPE, PORT ELIZABETH)
Case No.: 495/10
Date heard: 1 April 2010
Date delivered: 31 May
2010
In
the matter between:
MMA
SECURITY SERVICES CC
t/a
BROUBART SECURITY
FIZIK
INVESTMENTS (PTY) LTD t/a UMKHOMBE SECURITY SERVICES
1
st
Applicant
2
nd
Applicant
and
BRIAN
PAUL CALLANAN
NATIONWIDE
SECURITY
1
st
Respondent
2
nd
Respondent
JUDGMENT
KROON, J:
Introduction:
The applicants’ notice of
motion sought orders in the form of an interdict:
(a) implementing portions of a
restraint of trade provision contained in a contract of employment
concluded between the applicants,
as employers, and the first
respondent, as employee; in essence, restraining the first
respondent from being concerned in any
capacity in any business or
undertaking,
more particularly the second respondent, which competes in any manner
with the applicants in the Port Elizabeth area
within a period of 18
months from 28 February 2010;
(b)
restraining
the first respondent from enticing, soliciting or canvassing any of
the customers or employees of the applicants away
from the
applicants, whether for his own benefit or otherwise, for a period of
18 months from 28 February 2010.
[2] During argument Mr
Pienaar
,
for the applicants, intimated that the applicants were prepared to
accept a limitation of the restraint referred to in paragraph
1(a) to
activities engaged in by the first respondent in the Port Elizabeth
area.
[3] The proceedings were launched on
23 February 2010 on a semi-urgent basis and notice was given that the
application would be
moved on 9 March 2010. Service of the
application papers was effected on 23 February 2010. The respondents
were requested to
file their answering papers by 2 March 2010.
[4] Answering papers (by the first
respondent) were, however, only filed during the afternoon of 8 March
2010. Accordingly, the
matter was postponed on 9 March 2010 to 1
April 2010 with the costs reserved. In the interim replying papers
were filed.
[5] By letter dated 3 February 2010
the applicants’ attorneys had advised the first respondent that
unless he gave a written
undertaking by 5 February 2010, that, in
effect, he would not become concerned with the second respondent, or
any other firm competing
with the applicants, and that he would
adhere to the provisions of the restraint clause, the applicants
would launch interdict
proceedings against him and the second
respondent. A copy of the letter was forwarded by the attorneys to
the second respondent
on the same date and the threat of legal
proceedings was repeated. In further correspondence the stance of
the applicants was
affirmed.
The parties
[6] The first applicant, a close
corporation trading as Broubart Security, carries on the business of
the provision of security
services (including
inter
alia
the supply of security
personnel, security equipment, and armed response, monitoring and
investigation services) through its various
branch offices in Port
Elizabeth, East London, Aliwal North and George. The areas serviced
are the Nelson Mandela Metropole, the
Kouga magisterial district,
George, the Aliwal North magisterial district and East London and
surrounding areas encompassing the
Border-Kei region consisting of
the former Transkei, Ciskei and Border areas.
[7] The second applicant, a company
trading as Umkhombe Security Services, carries on a similar business
to that of the first applicant
and in the same areas.
[8] The two applicants are associated
corporate entities, each is registered as a security service provider
in terms of the Private
Security Industry Regulation Act 55 of 2001,
their joint administrative head office is situated at 151 Oxford
Street, East London
and their joint principal place of business
within the jurisdiction of this Court is situated at 11 Lawrence
Street, Port Elizabeth.
[9] The first respondent was
previously employed by the applicants, he having commenced such
employment on 1 December 2007 in the
capacity of
investigations/operations manager – Port Elizabeth and
surrounds. As will appear more fully below, the first
respondent is
at present in the employ of the second respondent.
[10] The second respondent carries on
a similar business relating to the provision of security services in
direct competition with
the applicants. More particularly, the
applicants and the second respondent compete in the same market in
the Nelson Mandela Metropole.
[11] The applicants recorded in their
founding papers that the second respondent was cited as an interested
party and no relief
was being sought against it, save for an order of
costs in the event of the second respondent opposing the application.
While
the second respondent filed an affidavit in support of the
first respondent’s response to the application, it did not
itself
seek to oppose the application.
Relevant principles applicable to
the relief sought
[12] The relief sought by the
applicants is a final interdict, the requirements for which are:
(a) a clear right;
(b) an injury actually committed or
reasonably apprehended;
(c) the absence of any other
satisfactory remedy.
[13] Disputes of fact on the papers
fall to be resolved by the application of the well-known
Plascon-Evans
principles.
[14] The approach of the Court when
requested to implement a restraint of trade provision is conveniently
analysed in
Omni
Technologies
,
1
with reference
inter alia
to the earlier case of
Reddy
.
2
In short, the Court exercises a value judgment on its assessment of
the facts seen in the light of both common law principles
as well as
constitutional values (the first essentially embodied in the maxim
pacta servanda sunt
, the
second essentially reflected in the provision in s 22 of the
Constitution that every citizen has the right freely to choose
his
occupation).
[15] In particular, paragraph 11(f) of
Omni Technologies
reads in part as follows:
‘
In applying these
two principal considerations the particular interests must be
considered. A restraint is against public policy
and unenforceable
if it would prevent a party after termination of his or her
employment from participating in trade or commerce
without a
corresponding interest of the other party deserving of protection.
Five questions require to be answered when the reasonableness
of a
restraint is considered (the fifth one being implied by the third).
Does the one party have
an interest that deserves protection after termination of the
agreement?
If so, is that interest
threatened by the other party?
In that case, does such
interest weigh up qualitatively and quantitatively against the
interest of the other party not to be economically
inactive or
unproductive?
Is there an aspect of
public policy having nothing to do with the relationship between the
parties that requires the restraint
to be maintained or rejected?
Does the restraint go
further than necessary to protect the interest?
The first respondent’s
employment with the applicants
[16] The main founding affidavit,
deposed to by Mr Wood, a member of the first applicant and director
of the second applicant, recorded
that during the first respondent’s
interview for the position it was explained to him:
(a) what the successful candidate’s
functions would be and what qualities and characteristics he should
have;
(b) that the position in question was
a senior one in which the employee would be exposed to the trade
secrets, trade connections
and confidential information of the
applicants;
(c) that accordingly the appointee (as
per the norm with all senior personnel) would be required to sign a
restraint of trade agreement,
for the protection of those secrets,
connections and information.
The first respondent signified his
agreement with those stipulations.
[17] A formal employment contract was
signed by the parties on 11 January 2008. The restraint provisions
were contained in clause
12 which read as follows:
‘
12. CONFIDENTIALITY
AND RESTRAINT
The Employee admits
that he/she will become acquainted with the Employer’s trade
secrets and confidential information
during the period of its
employment which will include:-
Knowledge and influence
over the clients of the Employer;
The contractual
relationships between the Employer and its clients;
The financial details of
the Employer’s relationship with its clients and suppliers;
The name of potential
clients and their requirements;
Such other particulars
with relation to the business of the Employer which are not readily
available in the normal course of the
business of a competitor of
the Employer.
The Employee admits
that if he/she is engaged or obtains an interest in any other firm
which competes with the Employer, it
will affect the interests and
rights of the Employer.
As a result the
Employee agrees that he/she will not within a period of Eighteen
Months as from the date of termination of this
agreement without
the prior written consent of the Employer become employed or obtain
an interest, directly or indirectly,
in any capacity whatsoever, in
any business or undertaking which competes or intends to compete in
any manner with the Employer
in the Nelson Mandela Metropole and
George Area. Agreement will however not apply should the employee
be retrenched.
For so long as this
agreement is in force, and for a period of three years after
termination for any reason whatsoever, the
Employee shall not
entice, solicit or canvass any of the customers or employees of the
Employer away from the Employer, whether
for his/her own benefit or
otherwise.
The Employee
acknowledges that the aforesaid restraint is fair in relation to
its ambit, geographical area and duration.”
[18] An annexure to the agreement set
out the job description of the first respondent’s position. It
was
inter alia
provided that one of his functions would be to promote the
applicants’ investigation services to existing and prospective
clients of the applications. These services included the conduct of
digital voice stress analysis (DVSA), a type of polygraph
testing, a
service that the applicants were the first to introduce in the Nelson
Mandela Bay Metropole. The first respondent would
receive training
therein. The first respondent was expected regularly to visit, and
to build up a close relationship with, the
customers of the
applicants; hence, he was given full access to the applicants’
client data base.
[19] During August 2009 the applicants
undertook a restructuring of the applicants’ Port Elizabeth
branch. The first respondent
was to be appointed operations manager
who would focus on the retail clients of the applicants. Another
employee was to be appointed
operations manager to focus on the
industrial/commercial clients of the applicants. Each operations
manager would have a number
of area managers, controllers and
inspector who reported to him. The position of operations manager
was a very senior position,
subordinate only to the group operations
manager, and the directors or members of the applicants. The
operations manager would
oversee and manage the entire operations of
the applicants.
[20] A new contract of employment was
signed by the first respondent on 17 September 2009, which reflected
that the first respondent
commenced his new position of operations
manager on 1 September 2009. The restraint clause embodied in the
contract was virtually
the same as the clause in the earlier
contract, save that the area of the restraint was now described as
the Port Elizabeth area.
[21] The functions of the first
respondent in the new position, as set out in the relevant job
description, embraced
inter
alia
the following:
A major part of his daily tasks was
to deal with the applicants’ clients and his fellow employees;
He was required to visit sites on a
daily basis;
He had to attend the management
meetings of the applicants at the head office in East London. (Only
the most senior personnel
of the applicants attended these meetings
and highly confidential issues were discussed at the meetings, eg
business strategies,
methods of delivery and improving services,
marketing methods, the state of the applicant’s business and
the contractual
relationship between the applicants and their
clients);
He had to be intricately involved in
all investigations where incidents occurred;
He was required to assess the
performance of employees working under him;
He, and not area managers, would
attend to the liaising with clients.
It was the applicants’ case that
there functions were performed by the first respondent.
[22] Further allegations by Wood were
the following: In his earlier capacity as investigations/operations
manager and later as
operations manager focussing on retail clients,
the first respondent, in the course and within the scope of his
employment with
the applicants, had access to, and in fact gained
intimate knowledge of, the applicants’ customer data base, and
specifically
the retail customer data base, in the Port Elizabeth
area, including, in respect of each customer, the following
information:
the names and contact number of the
clients;
details of the pricing of the
services rendered by the applicants;
details of the customer’s
security requirements;
the identity of the decision makers
of the clients;
critical costs limits for the
applicants for services rendered in terms of existing contracts;
the terms and conditions of the
individual contracts, including the renewal dates thereof;
any dissatisfaction expressed from
time to time with the services rendered, the nature of the
complaints, the ability and success
of the applicants in addressing
the complaints, and the impact thereon of the applicants’
costs structures;
the sites at which incidents occurred
that might jeopardise contracts and the remedial steps taken;
the nature and extent of the cost to
company components;
the income derived from services
rendered;
the critical control measures of all
costs factors relevant to the efficient and economical rendering of
such services;
the staff employed by the applicants
to render services, their salary structures, incentive and
performance schemes, the terms
and conditions of their employment,
and their performance history.
[23] The extent to which the first
respondent placed the above allegations in issue will be addressed
later.
The first respondent’s
employment with the second respondent
[24] The first respondent took his
annual leave from the applicants’ employment from 18 January to
8 February 2010, but resigned
in the interim and took up employment
with the second respondent on 1 March 2010 in the capacity of
operational manager.
[25] The answering papers make
inter
alia
the following
averments:
The first respondent’s duties
in his employment with the second respondent are those of the
project manager of a single
customer, MTN, supplying security
services at 280 MTN sites nationwide, with only four of the sites
falling within the Port Elizabeth
area; accordingly, 95 % of his
work will be performed outside Port Elizabeth.
The first respondent is nevertheless
based in Port Elizabeth for logistical and practical reasons.
MTN is not an existing client of the
applicants.
The second respondent renders
services to MTN of the same nature as the applicants render to their
clients.
[26] It is also alleged that if the
first respondent were to be obliged to relocate from Port Elizabeth
his wife would have to give
up her employment in this city and seek
replacement employment in the other venue.
The issues
[27] In his answering papers the first
respondent essentially raised three defences:
(a) that the matter was not urgent so
as to require it being heard outside the normal time periods
prescribed in the rules;
(b) that the restraint invoked by the
applicants is unreasonable;
(c) that the applicants have not
demonstrated that they have a protectable interest.
Urgency
[28] In argument, the first respondent
did not pursue the defence of an alleged lack of urgency save in the
limited respect of the
wasted costs occasioned by the postponement of
the proceedings on 9 March 2010. In short, the contention was that
the applicants,
when launching the proceedings on 23 February 2010,
were not justified in fixing 9 March as the date of the hearing and
requiring
the first respondent to file his answering papers by 2
March 2010; the applicants ought to have foreseen that the period
allowed
would prove to be too short and that a postponement of the
matter on 9 March would inevitably follow.
[29] Mr
Pienaar
referred me to numerous authorities to the effect that applications
to enforce restraint of trade agreements are, by their nature,
characterised by a measure of urgency. I agree with this approach,
and I am persuaded that it is of application in this matter.
[30] It is not without some relevance
that in correspondence which commenced on 3 February 2010 the first
respondent was forewarned
that the applicants intended to launch the
interdict proceedings.
[31] The founding affidavit of Word
comprised 40 pages, and the annexures thereto a further 75 pages.
The answering affidavit was
also 40 pages, with 40 pages of
annexures.
[32] It may well be, as Mr
Pienaar
submitted, that the failure of the first respondent to adhere to the
time frame stipulated in the notice of motion, was in part
to be
ascribed to the stance adopted by his attorneys in correspondence and
by himself in the answering affidavit, that the matter
was not urgent
(a stance that was wrong). Nevertheless, I have some understanding
of the first respondent’s inability to
adhere to the time frame
stipulated. On the other hand, I am not persuaded that the
applicants acted unreasonably in setting that
time frame. In my
view, a fair exercise of my discretion in the matter of costs, would
be to hold that the wasted costs in question
be costs in the cause.
The first respondent’s
undertaking
[33] As regards the relief set out in
prayer 2.2 of the notice of motion (the relief referred to in
paragraph 1 (b) above) reliance
was placed on the first respondent’s
behalf on the fact that prior to the launch of the proceedings his
attorneys had conveyed
to the applicants’ attorneys an
undertaking that he would not entice, solicit or canvass any of the
existing customers or
employees of the applicants away from the
applicants.
[34] The argument was therefore that
while the first respondent consented to an order in terms of prayer
2.2., it had been unnecessary,
in the light of the undertaking, for
the proceedings to have been launched, and the applicants were
accordingly not entitled to
their costs.
[35] In my judgment, however, Mr
Pienaar
correctly submitted that the applicants were not obliged to be
content with the undertaking. First, it is not to be gainsaid that
in taking up employment with the second respondent, a direct
competitor of the applicants, the first respondent already acted in
breach of the restraint of trade stipulations. Second, as will be
shown below, the first respondent is possessed of confidential
information that could be utilized to entice customers and employees
away from the applicants.
[36] In this regard the following
comments in Reddy
3
are opposite:
‘
[20]……Reddy
is in possession of trade secrets and confidential information of
Siemens. Moreover, shortly before his
resignation from Siemens, he
attended a training course updating his knowledge of the processes,
methodologies and systems architecture
developed by Siemens.
Information of this kind, if disclosed, could be used to the
disadvantage of Siemens. This is not a case
such as
Basson
v Chilwan
where an employer’s application to assert a protectable
interest in respect of customer connections against an ex-employee
who had no such connections was dismissed. 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 he 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.
In these circumstances the restraint is neither unreasonable nor
contrary to public policy. I agree with the remarks
of Marais J in
BHT
Water
:
‘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 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 services of a competitor.’
[21] Public policy
requires contracts to be enforced. This is consistent with the
constitutional values of dignity and autonomy.
The restraint
agreement in this matter is not against public policy and should be
enforced. Its terms are reasonable. What Reddy
is required to do is
to honour the agreement he entered into voluntarily and in the
exercise of his own freedom of contract. While
it is correct that
his employment with Ericsson will be restricted, it remains a breach
of his contractual undertaking. It follows
that it is no answer to
suggest that an undertaking would be sufficient to protect Siemens’
interests and that less restrictive
means could therefore achieve the
same purpose as enforcing the restraint (s 36(1)
(e)
). Such an approach was followed by the High Court of England and
Wales in the Queens Bench Division in
Gordian
Knot Ltd v Kenneth Towers
.
However, in
The
Littlewoods Organisation Ltd v Harris
c d Scorer v Seymour
Jones Freight Bureau (Pty) Ltd v Kruger and Another
Lord Denning MR remarked,
and I agree with his observations:
‘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.’
Protectable interest
[37] It was the submission of Mr
Pienaar
that the applicants have shown an interest worthy of protection, at
least in that the first respondent has built up customer connections
and has acquired confidential information and trade secrets of the
applicants (such connections, information and secrets constituting
in
law protectable interests
4
).
Any contrary suggestion, in respect of someone who held a senior
position in the applicants’ organization for as long
as the
first respondent did, would, so the argument continued, make nonsense
of logic.
[38] One averment made by the first
respondent in response to the allegations made by the applicants may
be given short shrift.
He claimed that the issue of a restraint
position had not been discussed with him, that he had not been
permitted to read either
of his contracts of employment (and was
therefore unaware that he was subjecting himself to any restraint)
and that he had been
required simply to sign the contracts, the first
because it was a standard contract, the second because it related to
his promotion.
The averment is untenable and, while adverting
thereto, Mr
Scott
,
for the respondent, understandably intimated that it was not part of
his argument that the first respondent was not bound by the
restraint
provisions. Similarly, it was not in dispute that the job
descriptions referred to earlier applied to the first respondent’s
employment with the applicants.
[39] Counsel sought, however to
support the first respondent’s denials that he built up any
connections with customers or
acquired confidential information or
trade secrets relating to the applicants’ business. Counsel
accepted that after the
first respondent’s promotion there was
a greater chance that such events would have occurred, but he sought
to emphasise
that the first respondent had only held the more senior
position for a period somewhat in excess of 4 months.
[39] The first respondent’s
averments invoked by counsel proceeded
inter
alia
as follows:
(a) It was only during an
investigation conducted by him after an incident had occurred at the
premises of a client that he had
any contact with any clients, and
then only those that fell into a certain category, namely those that
had periodical voice stress
tests as part of their contracts. Such
investigations, he estimated, had occurred a maximum of three times
per month, and almost
invariably there would be no interaction
between him and the client in person.
(b) While, with the passage of time,
he obviously became familiar with the sites of clients and who the
managers were, he did not
perform a marketing or liaison function,
and no relationships developed between him and the customers.
(c) The visits he made to sites, and
the subsequent reports compiled by him, were what he termed
operational in nature and information
relating to a particular
incident was not confidential in nature, and was valueless.
(d) No data base of clients was made
available to him, nor did he have any insight into any of the
applicants’ pricing mechanisms,
nor was he exposed to any
future business or strategic plans of the applicants.
(e) He had only attended one
management meeting in East London, and the only matters discussed at
the meeting were of a routine
operational nature.
[39] Accordingly, so it was contended,
the first respondent had not come by anything that could be regarded
as a protectable interest;
in short, he could not be, and was not, a
threat to any business interest of the applicants.
[40] The averments and contentions
cannot be accepted. In
Value
Logistics
5
it was said, correctly,
that the criteria to be applied in deciding whether an employee has
had access to customers and is in a
position to build up particular
relationships with customers, so that on his leaving his employer’s
service he could easily
induce the customers to follow him to a new
business, are essentially a question of fact. I further align myself
with the approach
reflected in the following passage from the
judgment:
‘
Common sense
should prevail that within the four years that the first respondent
spent in the employ of the applicant he must have
learnt of the style
of entertainment offered by the applicant to its customers and must
also have obtained trade secrets as protectable
proprietary interests
of the applicant. The first respondent during that period must have
fostered a close and ongoing relationship
with the customer
connections and built up extremely close relationships with the
applicant’s customers.’
[41] The comment may be made that even
on his own version the first respondent had direct contact with at
least some of the applicants’
customers. There is no
suggestion why such contact should not have been the foundation of a
relationship. He also would have
become aware of customers who,
consequent upon an incident occurring, might have harboured some
dissatisfaction with the applicants’
service, and who would
therefore have been susceptible to overtures to take their custom
elsewhere.
[42] But the whole picture painted by
the first respondent is an improbable one, and highly so. If his
activities were in fact
limited to the very occasional visits to a
site for the purpose of investigating an incident and reporting
thereon, one wonders
what he did with the rest of his time. Even on
his version of the nature of his activities it cannot be accepted
that there was
not close interaction between him and the client in
question. He is vague as to what the content was of the one meeting
in East
London he admits attending, ie the discussion ‘of a
routine operational nature’. In this regard, it may be
mentioned
that he does not deny attending other meetings in Port
Elizabeth. One queries, too, why the terms of his job descriptions,
admittedly
applicable to him, would not have been implemented and, in
particular, those applicable to him after his promotion when he was
to focus on retail clients, and, as it were, to head that department.
Common sense dictates a finding that the first respondent
did
develop the customer relationships and acquire the knowledge required
to constitute protectable interests in the hands of the
applicants.
(A comparison may be had with the
approach in
Fidelity Guards
6
where, in a somewhat similar matter, a denial by the employee of the
acquisition of relevant knowledge concerning matters relating
to his
employer’s business was held not to have the ring of truth and
so against the probabilities that it fell to be rejected).
[43] It was argued on behalf of the
first respondent that in the light of the
de
facto
position that obtains
(the first respondent being assigned to be project manager for a
single client, MTN) it was not open to the
applicants to contend that
the prospect of his prejudicing the applicants’ protectable
interest in his present employment
could not be excluded. I do not
agree. The first respondent’s loyalty is now owed to the
second respondent and his bending
to pressure by his present
employers, which is not unlikely, is not improbable. It is against
the risk of this happening that
the applicants are entitled to invoke
the relevant restraint provision.
Should the restraint be implemented?
[44] An allied argument on behalf of
the first respondent was that the applicants’ preparedness,
signified during the hearing,
to accept the first respondent’s
employment by the second respondent subject thereto that the first
respondent is not so
engaged in the Port Elizabeth area underlined
the contention that it would not be proper for any restraint against
the first respondent’s
being employed by the second respondent
to be enforced. It was said that being stationed elsewhere than in
Port Elizabeth would
not prevent the first respondent from acting
together with the second respondent (if they were so minded ) to the
prejudice of
the applicants. Therefore, the restraint had no virtue,
and certainly did not weigh up against other considerations such as
the
first respondent having to relocate and his wife having to give
up her present employment.
[45] The answer to the submission is
that the first respondent, when employed by the applicants, was
stationed in Port Elizabeth
and it was in respect of the applicants’
clients in the Port Elizabeth area that the applicants’
protectable interests
in the form of customer relationships,
confidential information and trade secrets came into being; and,
whether or not the first
respondent could do some damage to the
applicants even if he were employed by the second respondent
elsewhere, it would be while
he was working in Port Elizabeth that he
would more effectively be able to prejudice the applicants’
interest. If the applicants
are prepared to restrict their
protection to the extent in question, they are entitled to do so, and
it is no ground to deny them
any protection. It was not contended on
behalf of the first respondent that he would not be able to obtain
alternative employment
if the restraint sought were to be enforced.
If the first respondent opts to relocate in order to work for the
second respondent
and his wife has to leave her present employment,
that would be an unfortunate result that must yield to the legal
rights of the
applicants. The questions referred to in paragraph 15
above are answered in the applicants’ favour. The requirements
for
the grant of a final interdict have been met.
Order
[46] In the result, the following
order is issued:
(1) The first respondent is
interdicted and restrained from being employed or obtaining any
interest, directly or indirectly, in
any capacity whatsoever, in any
business or undertaking, conducted in the Port Elizabeth area, more
particularly the second respondent,
which competes or intends to
compete in any manner with the applicants in the Port Elizabeth area
within a period of 18 months
from 28 February 2010.
(2) The first respondent is
interdicted and restrained from enticing, soliciting or canvassing
any of the customers or employees
of the applicants away from the
applicants, whether for his own benefit or otherwise, for a period of
18 months from 28 February
2010.
The costs of the application will be
paid by the first respondent, including the wasted costs occasioned
by the postponement on
9 March 2010.
______________
F
KROON
Judge
of the High Court
Appearances:
For
the applicants:
Adv B J Pienaar
Instructed by:
Schoeman Oosthuizen Inc
Port Elizabeth
(Ref: Mr S
Oosthuizen/cl/C00893)
For
the 1
st
respondent:
Adv
P W A Scott
Instructed by:
Fredericks Incorporated
Port Elizabeth
(Ref: Mr C Beyleveld/LK)
1
Omni Technologies (Pty) Ltd v Barnard and Others
[2008] 2 All SA
207.
2
Reddy v Siemens Telecommunications (Pty) Ltd
(2007) SA 486
(SCA).
3
Note 2 above, paras [20]
et seq.
4
See eg:
Bovidale Investments (Pty) Ltd t/a Nashua Western Cape v
Nel
2008 JDR 004 (C);
BHT Water Treatment (Pty) Ltd v Lesley
1993 (1) SA 47
(W);
Value Logistics Ltd v Van Zyl
[2009] JOL
23613
(GNP);
MGK Bedryfsmaatskappy (Edms) Bpk v Trollip
[2006] JOL 18630
(T);
North Safety Products (Africa) v Nicolay
and Others
[2007] 3 All SA 647
(C);
Startrap Systems (Pty)
Ltd v Engelbrecht
[2006] JOL 18294
(W).
5
Note 4 above.
6
Fidelity Guards Holdings (Pty) Ltd t/a Fidelity Guards v Pearmain
2001 (2) SA 853
(SEC).