Gentech Engineering Plastic CC v Reddy and Others (2462/2008, 1422/2009) [2011] ZAECPEHC 31 (15 June 2011)

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[2011] ZAECPEHC 31
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Gentech Engineering Plastic CC v Reddy and Others (2462/2008, 1422/2009) [2011] ZAECPEHC 31 (15 June 2011)

IN THE HIGH COURT OF SOUTH AFRICA
(EASTERN CAPE – PORT
ELIZABETH)
CASE NO: 2462/2008, 1422/2009
DATES HEARD: 20-22/04/2010,
6-10/09/2010 & 15-24/09/2010,
25-26/01/2011
DATE DELIVERED: 15/06/2011
REPORTABLE
In the matters between:
GENTECH ENGINEERING PLASTICS CC
…........................................
APPLICANT
and
SIVALINGUM KEVIN REDDY
…..................................................
1
ST
RESPONDENT
KEITH BLAKE BELLING
…........................................................
2
ND
RESPONDENT
SHELDON MAURICE ZIMMER
…...............................................
3
RD
RESPONDENT
UREFLEX CC
…...........................................................................
4
TH
RESPONDENT
SUMMARY: Declarators that parties
in contempt of court for want of compliance with civil order of court
– requisites for same
– onus of proof – whether
requisites established – sanction to be imposed.
JUDGMENT
______________________________________________________________
KROON, J:
Introduction
This judgment is concerned in the
main with two applications for the grant of declarators that the
four respondents are guilty
of contempt of court for want of
compliance with an order of this Court, and further ancillary relief
pursuant to such declarations.
The applicant is Gentech Engineering
Plastics CC (Gentech), a close corporation conducting business in
Port Elizabeth
inter alia
as a manufacturer and purveyor of
polyurethane products, and products associated therewith.
The first respondent is Sivalingum
Kevin Reddy (Reddy), a businessman of Port Elizabeth, and a member
and employee of the fourth
respondent.
The second respondent is Keith Blake
Belling (Belling), a businessman of Port Elizabeth, and an employee
of the fourth respondent.
The third respondent is Sheldon
Maurice Zimmer (Zimmer), a businessman of Port Elizabeth, an
employee and formerly a member of
the fourth respondent.
The fourth respondent is Ureflex CC
(Ureflex), a close corporation carrying on business in Port
Elizabeth
inter alia
as a manufacturer and purveyor of
polyurethane products, and products associated therewith.
In general, the respective
respondents will be referred to by their names, but where convenient
they will be referred to collectively
as ‘the respondents’.
In one of the two applications and in
other associated proceedings certain other persons or entities were
joined as further respondents.
As will be indicated below, however,
these further respondents have fallen out of the picture, and only
where necessary will
further reference be made to them.
Relevant legal principles
Contempt of court
embraces
inter
alia
the
unlawful and intentional violation of the authority of a judicial
officer in his or her judicial capacity or of a judicial
body, and
accordingly the unlawful and intentional disobedience of a court
order constitutes a crime (and may be prosecuted as
such). This
approach accords with constitutional principles.
1
It is, however,
not only the State (by way of a prosecution – which, it may be
recorded, is hardly ever instituted) that
may pursue the imposition
of a criminal sanction for the wrongful and intentional failure to
obey a court order. A private litigant
who has obtained a court
order requiring an opponent to do or not to do something (
ad
factum praestandum
)
is permitted to approach the court again, in the event of
non-compliance, for a further order declaring the non-compliant

party to be in contempt of court, and imposing a sanction. The
sanction usually, though not invariably, has the object of inducing

the non-compliant party to fulfil the terms of the previous order.
2
The test
applicable when answering the question whether disobedience of a
civil order constitutes contempt is whether the breach
was committed
‘deliberately and
mala
fide
’
.
A
deliberate disregard is not enough, since the non-complier may
genuinely, albeit mistakenly, believe him or herself to be entitled

to act in the way claimed to constitute the contempt. In such a case
good faith avoids the infraction. Even a refusal to comply
that is
unreasonable may be
bona
fide
(though
unreasonableness could evidence lack of good faith).
3
When committal to
prison for contempt of court is sought the criminal standard of
proof beyond a reasonable doubt is applicable
(and thus
constitutional imperatives are recognized).
4
However, the
proceedings are not only criminal in nature; their civil character
remains, and civil mechanisms designed to induce
compliance, short
of committal to prison (or other criminal sanction), eg a declarator
that the respondent is in contempt of
court with associated civil
relief (such as not suspending the order pending appeal and barring
the contemnor from access to
the civil courts until the contempt is
purged) is competent even when the contempt is proved only on a
balance of probabilities.
5
The obligation of
the applicant is to prove the requisites of contempt (the order,
service or notice, non-compliance and wilfulness
and
mala
fides
)
beyond a reasonable doubt (or on a balance of probabilities, as the
case may be). But once the applicant has discharged the
onus it
bears of establishing knowledge and non-compliance, a presumption in
its favour arises, and the respondent bears an evidentiary
burden in
relation to wilfulness and
mala
fides
.
Should he fail to advance evidence that establishes a reasonable
doubt (or reverses or neutralizes the balance of probabilities
in
favour of the applicant) as to whether the non-compliance was wilful
and
mala
fide
the
applicant will have proved contempt beyond a reasonable doubt (or on
a balance of probabilities, as the case may be).
6
The requisites of
wilfulness and
mala
fides
will,
of course, be present when the non-complier wittingly breaches the
terms of the order in question. Direct intention is,
however, not
essential. Intention in the form of
dolus
eventualis
will
suffice, ie where the non-complier subjectively foresees the
possibility of his act being in contempt of court and he is
reckless
as to the result.
7
The subjective
state of mind of the non-complier is seldom capable of direct proof.
Subjective foresight, like any other factual
issue, can, however, be
proved by inferences drawn from the party’s conduct and the
circumstances in which the breach of
the order was committed.
8
As will appear
below, part of the defence invoked by the respondents to the charges
of contempt of court was that they sought,
and acted upon, legal
advice from their attorney, Mr Friedman. In this regard, it may be
noted that it is not open to a party,
in interpreting a court order,
to seek legal advice in a search for ways improperly to evade the
effect of the court order.
9
Moreover, the
defence of ‘legal advice’ requires that the
circumstances under which the advice was sought and given
must be
fully set out, so that it may be determined whether or not the
advice was predicated on incorrect facts/
mala
fide
instructions.
10
Background
Reddy, Belling and Zimmer were all
previously employed by Gentech. Having earlier worked for Gentech
from 1985 to 1991 Reddy resumed
such employment on 31 May 1995 as
production and development manager. During 2005 he became a sales
representative within Gentech’s
sales team. He resigned from
Gentech on 11 June 2008, with effect from 1 July 2008.
Belling was appointed by Gentech on
28 November 1988 as a sales specialist. During the following year he
was promoted to sales
manager. In 2000 he became general manager,
but after nine months, pursuant to internal restructuring, he
reverted to the position
of sales manager. On 1 July 2008 he was
initially suspended from his employment and subsequently, after the
launch of the interdictory
proceedings referred to below, his
employment was terminated.
Zimmer commenced employment with
Gentech during approximately 1988 as an internal sales clerk. After
a short break of a few months
during 1991 he rejoined Gentech and in
May 2001 was promoted to product/specialist manager. He, too, was
initially suspended
from his employment on 1 July 2008 and
subsequently dismissed.
The employment of all three
respondents was subject to restraint of trade and confidentiality
provisions.
After the respective terminations of
their employment with Gentech the respondents commenced employment
with Ureflex.
Ureflex was incorporated by Reddy and
Zimmer during 1998. In papers filed in the interdict proceedings
(referred to below) it
was admitted by all four respondents that the
incorporation of Ureflex was with the intended purpose of commencing
operations
in competition with Gentech. Such competing operations in
fact commenced during 2008.
Court order of 8 August 2008
In the papers filed in the present
proceedings, and during the hearing of oral evidence referred to
below, this order was referred
to as the ‘Greenland Order’,
it having been granted in this Court by
Greenland
AJ on 8
August 2008 in case no. 1419/08. I will refer to it as the interdict
order.
On 10 July 2008 Gentech instituted
proceedings on an urgent basis against the respondents (and two
other entities) in which certain
interdictory relief was claimed on
the basis of the alleged conduct of the first three respondents
(acting
inter alia
via Ureflex). The relief was claimed in
contract and in delict, the former arising from the first to third
respondents’
alleged breach of the restraint of trade and
confidentiality provisions in their contracts of employment with
Gentech, and the
latter arising from their alleged unlawful
competition and breach of fiduciary duties, including: the
misappropriation of Gentech’s
confidential information, the
diversion and exploitation of Gentech’s business
opportunities; the utilisation of Gentech’s
resources and
infrastructure; the solicitation of Gentech’s clients; and the
passing off of Gentech’s products.
It was admitted by the respondents
that the first three respondents had acted in breach of their
fiduciary duties and that their
conduct had been disgraceful. In the
result, the merits of Gentech’s case were all but conceded by
the respondents, and
their opposition was limited to the issue of
the period for which the interdict provided for in paragraph 2.3 of
the interdict
order was to be operative.
The substantive relief granted by
Greenland
AJ against the respondents read as follows:
‘
2.
Pending the outcome of an action to be instituted by the applicant
for final relief within one month from the date of this order
the
respondents are:
2.1 interdicted and
restrained from utilising the applicant’s confidential
information and documentation in any manner or
form, and in
particular, but without limitation, any information relating to the
applicant’s clients, agents, suppliers,
designs and pricing
structures as set out in schedule “X” attached to the
notice of motion and in the annexures to
the replying affidavit as:
2.1.1 “R A 1”;
2.1.2 “R A 4”;
2.1.3 “R A 10”
and “R A 11”;
2.2 interdicted and
restrained from unlawfully competing with the applicant;
2.3 interdicted and
restrained for a period of twelve (12) months from contacting or
soliciting the applicant’s clients, agents
and suppliers listed
in annexure “X”, and from continuing to deal with Cadbury
(Nigeria) and Transwerk;
2.4 ordered forthwith to
return to the applicant copies of all confidential information in the
respondents’ possession;
directing (sic) the
second respondent (ie Belling) to permanently delete in the
presence of
representatives of the applicant all information contained on his
computer mass storage device (flashdrive) and computer(s)
relating to
the aforesaid confidential information.’
(For convenience, the annexures listed
in the order will hereinafter be referred to by their identifying
letters. Annexure “X”
contained
inter alia
lists
of customers and of suppliers of Gentech and annexures “RA1”
and “RA4” consisted of lists of a large
number of
drawings identified only by their numbers. Annexures “RA10”
and “RA11” comprised documentation
relating to a detailed
analysis and comparison of Gentech’s profit/pricing
structures).
On 3 September 2008 the respondents
unsuccessfully applied for leave to appeal against the interdict
order.
Under circumstances which it is not
necessary to detail, the requirement relating to the outcome of the
institution of action
by Gentech referred to in the preamble to
paragraph 2 of the order fell away, and the order became an absolute
one.
The judgment of Greenland AJ embraced
inter alia
the following findings:
Each of the first three
respondents was a key man in Gentech’s organisation with a
high level of knowledge regarding Gentech’s
products, client
base, customer lists and pricing structure.
The respondents (and the
other two entities cited) had cooperated with each other
clandestinely to utilise Gentech’s confidential
information,
designs and processes to ‘springboard’ their new
business in direct competition with Gentech. The conduct
of the
respondents was deviant in that it lacked the fairness and honesty
required of them in the circumstances, and was unlawful.
The circumstance that
the first to third respondents’ contracts of employment with
Gentech embraced covenants restraining
them from employment in
competition with Gentech (for varying periods) carried only marginal
weight: the application did not
seek the enforcement of the
covenants.
The first contempt application
Under case no. 2462/08 Gentech
launched application proceedings on 21 November 2008 in which the
four respondents were cited.
As was the case during the hearing of
the oral evidence this application will for ease of reference be
referred to in this judgment
as the ‘A & D application’.
The relief sought was:
a declarator that the respondents
were in contempt of the interdict order;
orders in respect of the sanction(s)
to be imposed on them;
a joint and several order for costs
on the attorney and client scale.
The founding papers were followed by
opposing and replying papers.
In essence, the dispute between the
parties centred around certain dealings that Ureflex had with a firm
styled A & D Tyre
Manufacture Technologies (Pty) Ltd (A & D)
concerning the supply by the former to the latter of what was
referred to as Barry
mounts, a type of anti-vibration foot-mount
(also referred to during the proceedings as a ‘footpad’),
and the issue
whether such supply constituted an infraction of one
or other provision of the interdict order.
Because of disputes of fact on the
papers
Liebenberg
J issued the following order on 11 December
2008:
‘
1.
That the application is adjourned to a date to be arranged by the
Registrar for the hearing of oral evidence, in terms of rule
of court
6(5)(g), on the issue as to whether or not the respondents used the
applicant’s confidential information in designing,

manufacturing and supplying the footpad to A & D Tyres (Pty) Ltd.
2. That the deponents to
the applicants filed on behalf of or in support of the applicant and
the respondents are to be available
at the hearing for examination
and/or cross-examination.
That leave is granted to
both parties to subpoena witnesses to attend the adjourned hearing.
Affidavits by any witnesses the parties
intend to call and who have
not yet made affidavits as well as supplementary affidavits by
witnesses who have already made affidavits
and which deal with
matters not included in the original affidavits must be filed by the
parties at least 10 court days before
the date of hearing.
That the provisions of
rules of court 35, 36, 37 and 38 are to apply in regard to the
adjourned hearing.
That the costs of the
hearing on 11 December 2008 are to stand over for determination at
the adjourned hearing.’
The date initially allocated by the
Registrar for the hearing of the oral evidence was 18-20 March 2009.
In the light of later
developments, however, the hearing was
postponed.
Anton Piller application
Prior to the date fixed for the
hearing of oral evidence in the A & D application Gentech
launched a further application,
on 27 February 2009, in which
Anton
Piller
type relief was sought. In addition to the four
respondents two other entities were cited as further respondents,
namely Graymaur
CC (Graymaur) and a Mr Chellew (a businessman
trading under the name and style of Raytech). In the nature of
things, this application
was brought on an
ex parte
basis.
For convenience, this application (case no. 486/09) will be referred
to as the
Anton Piller
application and the orders made
therein as the
Anton Piller
orders.
The essential foundation invoked by
Gentech for its seeking
Anton Piller
type relief was the
allegations that the respondents were continuing to act in contempt
of the interdict order, in more extensive
respects than merely in
relation to A & D, that they were breaching the interdict order
by having contact with Graymaur,
that they were circumventing the
provisions of the interdict order by the interposing of Graymaur and
Raytech between Ureflex
and entities named in the interdict order
and via that stratagem supplying the latter entities with products
(or obtaining supplies
from them), that in so doing they were
utilising Gentech’s confidential information, designs and
processes to achieve springboarding,
that the respondents had not
made proper discovery for the purpose of the oral hearing, and that
the parties cited in the proceedings
were in possession of documents
or articles constituting vital evidence in substantiation of
Gentech’s allegations in proceedings
already instituted and
still to be instituted (ie further contempt applications), in
respect of which there was a real apprehension
that such evidence
might be concealed or destroyed before any hearing or proper
discovery has been made.
On 27 February 2009
Jansen
J
granted an
Anton Piller
type order subject to a series of
conditions and safeguards. The nature of the items to be searched
for and seized was stipulated
in an annexure to the order. The
premises to be searched were stipulated to be those of the parties
cited in the proceedings
plus any other premises to be pointed out
by those parties in the event of any of the items to be searched for
being at such
other premises. The costs of the
Anton Piller
application were reserved for determination in the proceedings to be
instituted.
The order was executed on 2 March
2009. Subsequently, all the parties cited filed papers opposing the
order, but thereafter they
consented to its ‘confirmation’
on 19 March 2009 by
Jansen
J
.
This second
Anton
Piller
order allowed the representatives of Gentech to inspect
and copy the documents, items and things seized by the sheriff
pursuant
to the first
Anton Piller
order, again subject to
certain conditions and safeguards. The costs of the application for
confirmation were reserved for determination
at the instance of
‘either party’.
The second contempt application
On 27 May 2009 Gentech launched
further proceedings under case no 1422/09. For convenience, as
during the hearing of oral evidence,
this application will be
referred to as the Graymaur application. In addition to the four
respondents with which this judgment
is concerned Gentech also cited
Graymaur and Volkswagen of South Africa (Pty) Ltd (Volkswagen) as
the fifth and sixth respondents.
The relief sought against the four
respondents was similar to that sought in the A & D application
(paragraph 31 above). Again,
the founding papers were followed by
opposing and replying papers. The dispute between the parties in the
main centred around
the allegations by Gentech as to the further
conduct of the respondents, as set out in paragraph 37 above, as
well as in other
respects, in relation, in particular, to the
intended supply of goods to Volkswagen, and the issue whether same
constituted an
infraction of one or other provision of the interdict
order.
The substantive relief sought against
Graymaur and Volkswagen was the grant of an interdict, to be
operative pending the outcome
of an action to be instituted within
30 days, against the award, or execution, of any tenders for the
supply of polyurethane
products by Graymaur to Volkswagen, including
two specified tenders.
In the result, Gentech reached
settlements with Graymaur and Volkswagen, the tenders were not
implemented and the proceedings
against the latter two parties
terminated.
In addition, further disputes between
Gentech and the respondents concerned dealings, or alleged dealings,
that Ureflex had with
other entities listed in annexure “X”,
directly or indirectly.
The papers filed in the Graymaur
application revealed a number of factual disputes between Gentech
and the four respondents.
Jansen
J accordingly issued the
following order on 11 June 2009:
‘
1.
That the application for contempt of court against the first to
fourth respondents is postponed for the hearing of oral evidence.
2. That at the hearing
each party can call any witness that has testified in these
proceedings and any other witness it wishes to
call to give evidence,
provided that a summary of such witness’s statement be made
available to the opposing party/parties
no less than 10 days before
the hearing of the matter.
3. That the first, second
and third respondents are to be available at the hearing for
examination and/or cross-examination.
4. That the applicant is
entitled to subpoena any other witness to appear at the hearing to be
cross-examined by the applicant’s
legal representatives.
5. That the provisions of
rules 35, 36, 37 and 38 of the Uniform Rules of Court shall apply.
6. That this matter is
consolidated with the matter of Gentech Engineering Plastics CC v S M
Zimmer and Others, case no. 2462/2008
(Eastern Cape High Court, Port
Elizabeth); the latter case already having been referred for the
hearing of oral evidence on 11
December 2008.
....
8. That should the
applicant intend to rely on any other instances in support of its
allegation of contempt that are not already
dealt with in the
affidavits, the applicant shall give notice thereof in the form of a
summary to the first - fourth respondents
not later than 20 days
before the commencement of the hearing of the oral evidence.
That the issue of costs,
including the wasted costs of 11 June 2009, are reserved for
determination at the hearing of oral evidence.’
Further order in respect of costs
In a further application brought
before
Froneman
J by Gentech the following order
inter
alia
was made on 20 October 2009:
‘
That
the costs of the
Anton
Piller
application in respect of the first to fourth respondents (reserved
for determination in paragraph 11 of the order made by
Jansen
J
dated 19 March) be determined in the contempt proceedings under case
no. 1422/2009 (ie the Graymaur application) referred to oral
evidence
in terms of the order made by
Jansen
J
dated 11 June 2009.’
(Other costs orders were also made,
but it is unnecessary to refer thereto for the purposes of the
present judgment).
Representation of the respondents
at the hearing of oral evidence
At the commencement of the hearing of
oral evidence on 20 April 2010 the respondents were represented by
attorney
Friedman
. On 22 April 2010, however, Mr
Friedman
was obliged to withdraw from the matter – it was likely that
he would give evidence. The matter was accordingly postponed
sine
die.
I issued a further order, pursuant to a tender by Mr
Friedman
on behalf of the respondents, that the costs
occasioned by the postponement be paid by the respondents jointly
and severally,
the one paying the others to be absolved.
In the result, when the hearing
resumed on 6 September 2010, the respondents, fully aware of their
rights in respect of legal
representation, advised me that they
would represent themselves, and I further granted leave for Ureflex
to be represented by
Reddy, then its sole member.
Subsequently, on 23 September 2010,
the hearing was again postponed to 25 January 2011. Prior to the
latter date Mr
Friedman
had filed papers reflecting that his
firm had been reinstated as the attorneys acting for the
respondents. It had been envisaged
that counsel would be instructed
to appear for the respondents, but Mr
Friedman
had not been
sufficiently instructed on that score and because he himself could
not appear for the respondents – he had
been a witness at the
hearing – he was obliged once more to withdraw. The first
three respondents continued to represent
themselves and Reddy to
represent Ureflex.
Interlocutory rulings
When the hearing of oral evidence
commenced Mr
Friedman
moved two applications for
interlocutory relief. I dismissed both applications with costs and
intimated that the reasons for
my rulings would be furnished later.
The reasons now follow. I preface my comments by recording that in
what follows I have not
considered it necessary to deal with each
submission and counter-submission made on behalf of the parties.
The first application sought an order
that Gentech make available for inspection the documents referred to
in an earlier notice
in terms of rule 35(3) delivered by the
respondents. The documents were ‘
all of
[Gentech’s] invoices, supplier notes, delivery notes,
quotations and any communications in respect of business dealings

[between Gentech and a number of entities] for the period January
2007 to the 31 July 2008’
. The named entities comprised
21 businesses.
Ancillary orders sought were that, in
the event of the above relief being granted, the matter be postponed
and that Gentech pay
the wasted costs of the postponement. These
further prayers were, however, abandoned, no doubt because one of
the points taken
on behalf of Gentech in resisting the application
was that it was a ploy to engineer a delay in the proceedings.
All of the 21 entities referred to
above were listed as suppliers of Gentech on annexure “X”
to the interdict order.
Only in respect of one of them, Belting
Supplies, had Gentech made the allegation that the respondents
breached the interdict
order, ie paragraph 2.3 thereof, in that the
respondents made commercial contact with Belting Supplies.
Gentech resisted disclosure of the
documents in question
inter alia
on the grounds that the
contents of the documents were irrelevant and that the application
sought disclosure of confidential
information of Gentech in
circumvention of the interdict order. It is necessary only to refer
to the first aspect.
I was not persuaded that any of the
counters invoked by the respondents, and echoed by Mr
Friedman
during argument, had any merit. I preface my remarks by commenting
that the oft-stressed observation, both in their papers and
in
argument, that the respondents faced possible committal to prison
should findings of contempt of court be returned against
them, could
not and did not found any subversion of principles, relating to both
procedural and substantive law, that were otherwise
applicable.
The main contention was that in the
interdict proceedings Gentech had been guilty of exaggeration in its
claims of confidential
information and of its relationships with
other businesses. Disclosure of the documentation sought would
reveal what the true
position was in respect of the 21 entities
listed by the respondents, either that Gentech had no relationships
with the entities
or that the nature of the relationships was such
that they were not worthy of protection.
A number of results, so it was
contended, would flow therefrom. First, the ‘overall
credibility’ of Gentech (ie its
witnesses) would be adversely
affected. Precisely in respect of which factual disputes that
required to be resolved in these
proceedings the contended for
effect on Gentech’s credibility would come into play, was,
however, not elucidated. I was
satisfied that a collateral matter
that was so peripheral as that presently under discussion could not
possibly have any cognizable
influence on any of the issues that had
to be decided in these proceedings.
Second, if my understanding and
paraphrasing of the argument were correct, it was contended that
such alleged construction of
the documents in question would enjoin
a new approach to the interpretation to be attached to paragraph 2.3
of the interdict
order and to the decision what would constitute an
infraction thereof.
I digress for a moment to record that
the respondents averred at one stage that Gentech had adopted the
stance that the interdict
order had to be complied with to its
strict letter and that that literal approach entailed, eg that
Belling could not make a
private purchase of a bottle of wine from
Makro, a large department store listed on annexure “X”,
as such would constitute
‘contact’ with Makro. Suffice
it to say that the respondents had clearly misread Gentech’s
attitude. The attorneys
for Gentech had done no more than convey
that strict compliance with the interdict order would be insisted
upon (without according
to it the interpretation referred to). It
was in fact Mr
Friedman
who, in correspondence with his
clients, expressed the view that strict compliance with the order
would require adherence to the
interpretation in question; hence, an
objection on behalf of the respondents during earlier proceedings to
such an interpretation
being applied. Counsel for Gentech had,
however, in open court immediately put the respondents right, and,
as was to be expected,
stated that Gentech never had the intention
to seek to apply the interpretation in question. As I put it during
argument, surely
no-one would seriously suggest the interpretation
referred to (although that is what Mr
Friedman
did in the
correspondence referred to, and in fact he sought to pursue that
interpretation in his testimony during the hearing
of oral
evidence). What the interdict order proscribed was commercial
contact with, and solicitation of, an entity listed on
annexure “X”
in the fields within which Gentech did business. As was stated in
Gentech’s papers in opposition
to the grant of the
interlocutory relief sought:
‘
Where
the dealings in question do not encompass the commercial activities
protected by the terms of the order, there can be no question
of
contact or solicitation in contravention of the court order’.
It was averred by the respondents,
and repeated during argument, that when annexure “X” was
agreed upon (the respondents,
it may be noted, then being
represented by senior counsel) proper thought had not been given to
its content, that content was
in fact erroneous, as would be
demonstrated if the documents of which disclosure was sought had the
content contended for, in
that the names of the entities concerned
would then have been wrongly included in annexure “X”.
The same would apply
to any other entity on the annexure with which
Gentech had no relationship or one that was not worthy of
protection. The respondents
were accordingly free to contact or
solicit any such entity as they wished.
I enquired of Mr
Friedman
whether the effect of his submissions was in fact an invitation to
me to revisit the application that came before
Greenland
AJ
and to vary the terms of the order made by him. The attorney was
quick to disavow any such intention and acknowledged, correctly,

that such invitation would not be a valid one. Despite his
disclaimer, however, the argument presented clearly did seek to do

just that.
I turn to deal specifically with the
issue relating to Belting Supplies. It is to be stressed that the
case Gentech sought to
make was
inter alia
that the
respondents had breached paragraph 2.3 of the interdict order. I
have already, in paragraph 59 above, recorded what paragraph
2.3
proscribed. Whatever the documents of which the respondents sought
disclosure might have revealed, Belting Supplies was listed
in
annexure “X”, and the respondents were prohibited from
contacting or soliciting Belting Supplies in the sense
referred to
in paragraph 59 above. Whether the respondents did so and were in
contempt of court were the issues that I was required
to resolve.
The documents in question were not relevant to those issues.
Third, it was contended that the
documents that the respondents required to be disclosed would have a
bearing on the outstanding
issue of the costs of the
Anton Piller
application, reserved for decision in the present proceedings.
It was averred in the respondents’ papers filed in the
interlocutory
application, and sought to be stressed by Mr
Friedman
during argument, that in the Graymaur application the papers filed
in the
Anton Piller
application were incorporated by direct
reference.
It is so that substantial portions of
the
Anton Piller
papers were incorporated by direct reference
into the Graymaur application. But I did not understand how the
documents at present
in issue would bear on the issue of the costs
of the
Anton Piller
proceedings. What I would stress is that,
save for Belting Supplies, none of the entities named by the
respondents featured in
the Graymaur application.
Echoing sentiments already recorded
earlier in another context, it was contended on behalf of the
respondents that the documents
could expose exaggeration on the part
of Gentech in respect of its confidential information and trade
relationships, also in
its papers filed in the
Anton Piller
application, which would be a relevant consideration when I
exercised my discretion in making an order in respect of the costs

of that application.
There is a short answer to that
submission. It may be recorded that in his judgment of 20 October
2009
Froneman
J explained why he ordered that the costs of
the
Anton Piller
application (in respect of the present
respondents) be determined by the Court finally hearing the Graymaur
application (paragraph
46 above), namely because that Court would be
in a better position to decide whether the grant of the
Anton
Piller
order had any material effect on the outcome of those
proceedings. Notwithstanding that both the A & D and the
Graymaur matters
were referred for the hearing of oral evidence, the
present proceedings remained application proceedings. The Court will
not
lightly allow further oral evidence in application proceedings
(which on analysis was what the respondents were seeking) if the

only issue on which that evidence might have a bearing relates to
costs. Instead, the Court will do the best it can with what
is
before it (cf
Eskom v Rini Town Council
1992 (4) SA 96
(E) at
99D).
The other application brought on
behalf of the respondents at the commencement of the hearing of oral
evidence sought relief of
a two-fold nature. First, the respondents
sought orders amplifying or varying the two earlier orders referring
the present applications
for the hearing of oral evidence. Second,
an order was sought that Gentech produce certain items at the
hearing.
The first amplification sought
applied to both earlier orders. The respondents requested that the
words ‘unless the court
otherwise directs’ be inserted
at the end of paragraph 3 of the order in the A & D application
(paragraph 34 above)
and at the end of paragraph 2 of the order in
the Graymaur application (paragraph 45 above).
However, it will suffice to say that
it was always open to this court to give such directions in the case
of any further witness
either side wished to subpoena, and there was
no necessity for any order amplifying the earlier order.
The further amplification sought by
the respondents of the earlier order made in the A & D
application was the insertion of
a new paragraph, to be numbered
3(a), and reading as follows:
‘
Either
party is entitled to subpoena any other witness to appear at the
hearing to be cross-examined by that party’s legal

representative.
The variation sought of the earlier
order made in the Graymaur application was the substitution for
paragraph 4 thereof of a new
paragraph reading as per the proposed
new paragraph 3(a), set out in paragraph 70 above.
The items which the respondents
desired should be produced by Gentech were described as follows:
‘
1.
the master sample in the applicant’s storeroom of the McCain’s
de-husking roller (the original product);
the original drawing in
respect of the McCain’s de-husking roller;
the applicant’s
de-husking roller manufactured in accordance with its own drawing.’
Mr
Friedman
again sought to
lay stress on the fact that the respondents were facing a possible
criminal sanction, and submitted that fairness
required that the
respondents be given the sinews of war requested. I do not find it
necessary to add anything to what I have
already said on this score
in paragraph 55 above.
I will deal first with the issue of
the de-husking roller. In the
Anton Piller
application it was
alleged on behalf of Gentech that it had designed a de-husking
roller for a customer styled McCains, and supplied
same to it, and
that the respondents had made use of the design. The relevant
drawing is one of those referred to in the interdict
order. Mr
Friedman
advised me that it was the respondents’
averment that the allegations on behalf of Gentech were false in
that the article
produced by Gentech had in fact been cloned from an
original product by an employee of Gentech, a Mr Booysen.
However, it is important to stress
that no contempt proceedings have been instituted by Gentech in
respect of any alleged dealing
by any of the respondents with
McCains or any alleged use by them of the drawing referred to above.
It was argued on behalf of
Gentech that the de-husking roller issue
was therefore irrelevant to the present proceedings.
Mr
Friedman’s
counter
submission was that the de-husker issue was ‘part and parcel
of the contempt proceedings’. I disagree. I
agree that it is
irrelevant. In so far as the attorney’s argument once again
embraced the contentions that Gentech had
been guilty of
exaggeration and that its overall credibility was compromised, the
remarks I have made earlier on this score are
mutatis mutandis
of application. Again, it was emphasised that I was being asked also
to make a costs order in respect the
Anton Piller
application, and it was argued that the de-husker issue was relevant
to that issue. Again, however, the remarks made earlier
in respect
of the undesirability in application proceedings of permitting oral
evidence to be tendered if the only issue on which
that evidence
might have a bearing relates to costs, find application.
In elucidation of the need for the
respondent to have the benefit of the amplification of the earlier
order made in the A &
D application quoted in paragraph 70 above
Mr
Friedman
advised me that it would enable him to subpoena
and cause a Mr Gomes, an employee of Gentech, to enter the witness
box. The evidence
he wished Gomes to give (unless, as it was put, he
perjured himself) was confirmation of the testimony that he, Mr
Friedman
, stated Reddy would give, namely to the following
effect: that he, Reddy, had obtained a foot-mount manufactured by a
firm styled
Ashton Seals; that he cloned same and the resultant
product was handed by him to Gomes for a drawing thereof to be
prepared by
the latter; that Reddy approved the drawing; it was that
drawing that Gentech used in the manufacture of its foot-mount and
in
respect of which it was asserting confidential information, which
in the circumstances it was not (apart from the fact that the

respondents also claimed that the foot-mount they supplied to A &
D was materially different from Gentech’s product).
This
evidence would stand in contradiction of Gentech’s case that
its drawing was unique and that same had been utilised
by the
respondents to make the article supplied to A & D.
Mr
Friedman
further stated
that he anticipated that Gomes would prove to be uncooperative, if
not hostile, and would likely not be prepared
to attend a
consultation and make an affidavit.
Adverting to Mr
Friedman’s
statements from the Bar as to what Reddy’s testimony would be
Mr
Ford
, for Gentech, pointed out, first, that in the papers
filed in the A & D application
Reddy had confirmed Belling’s
statement
that after he had replicated the foot-mount obtained
by him it was
he
,
Reddy
, who prepared the drawings of
the resultant product. Second, Mr
Ford
pointed out that Mr
Friedman’s
statements from the Bar as to what Gomes’s
attitude might be were no more than expressions of opinion.
Counsel then adopted a question I put
to him, whether the application moved by Mr
Friedman
was not
in any event premature and developments in the case should be
awaited, eg the content of the evidence that Reddy would
give, more
concrete information about the stance of Gomes, and the respondents’
decision on whether they would persist
in seeking Gomes’s
presence in the witness box. I raised the same question with Mr
Friedman
and I understood him to concede that evidence given
by Reddy would indeed be relevant and could possibly dispose of the
perceived
need to call Gomes as a witness, and to accept that he
could bring an application for the relief he sought, later in the
proceedings,
if so advised.
In passing, Mr
Friedman
also
mentioned Booysen as a possible witness in the A & D
application. The remarks made above would, however apply in respect

of Booysen as well.
Finally, Mr
Friedman
advised
me that the need for the variation of the referral order in the
Graymaur application arose out of his wish to call Booysen
as a
witness to give evidence as foreshadowed earlier in respect of the
McCain de-husking roller issue. His submissions were
of the same ilk
as those made in respect of Gomes and the foot-mount. The reasons
furnished earlier why I refused to issue an
order that Gentech
produce its de-husking roller also rendered it inappropriate to
receive the evidence of Booysen thereanent
which Mr
Friedman
stated from the Bar would be given. Again, a basis for ordering the
variation sought was absent.
The costs orders made by me in
respect of the two interlocutory applications dealt with above were
in accordance with the general
rule that costs follow the event.
These costs should of course be paid by the respondents on a joint
and several basis.
When, after the postponement referred
to above, the hearing resumed on 6 September 2010, Mr
Ford
applied for an order that the respondents comply with a request in
terms of rule of court 35(3) filed earlier by Gentech. The

respondents were required to make available for inspection the files
and other documentation relating to the advice given by
attorneys
Friedman Scheckter to the respondents, whether before or after the
termination of the employment of the first three
respondents with
Gentech, with regard to the respondents’ conducting business
in competition with Gentech.
The background to the application was
the frequent reference by Belling, who had not yet completed his
spell in the witness box,
to the respondents’ having from time
to time acted on legal advice received from Friedman, and, second,
the delivery by
the respondents of a statement authored by Friedman,
with annexures thereto (including certain correspondence between him
and
the respondents), which foreshadowed the evidence he would give
when called to testify on behalf of the respondents, in respect
of
legal advice he had furnished to the respondents.
Mr
Ford
submitted that without
access to the further documentation required to be disclosed, his
further cross-examination of Belling,
and of the other respondents
which was to follow, would be unjustifiably restricted, and he
pointed out that there had clearly
been a waiver of privilege on the
part of the respondents in respect of the advice in question. Mr
Ford
recognized, however, that he could not seek a blanket
disclosure of the documentation in question, but only of those
documents
or portions of documents in respect of which the waiver of
privilege operated and which were of a relevant nature. He therefore

accepted that any order I make should provide for ‘checks and
balances’ to safeguard the interests of the respondents

against unwarranted disclosure.
The attitude adopted by, or on behalf
of the respondents, was that there was no objection to the order
sought, provided that the
‘checks and balances’ referred
to were incorporated.
I accordingly granted the following
order, the terms of which were agreed upon between the parties (the
respondents clearly having
had the benefit of advice from Friedman):
‘
1.
Subject to paragraphs 2 to 4 below, the first to fourth respondents
(collectively, “the respondents”) be and are
hereby
directed to make available for inspection by the applicant and/or its
legal representatives the files and documentation
of attorneys
Friedman Scheckter, the respondents’ erstwhile attorneys,
pertaining to the following matters before this Honourable
Court:
Case no. 1419/08;
Case no. 2462/08;
Case no. 468/09;
Case no. 1422/09,
in relation to advice
given by the said attorneys regarding the conduct by the respondents
of business in competition with the applicant
whether before or after
the termination of the first to third respondents’ contracts of
employment with the applicant in
June and July 2008.
Mr GJ Friedman is hereby
afforded an opportunity until 12 noon, 7 September 2010 to review
the said files and documents and remove
therefrom all documents
which he considers irrelevant to the matters identified in paragraph
1 above.
Upon completion of the
exercise referred to in paragraph 2 above, Mr Friedman shall deliver
to:
the applicant’s
attorneys those portions of the files which he considers relevant
to the identified matters; and
Mr RH Parker of Pagdens
Attorneys all or any documents removed by Mr Friedman for Mr Parker
to review and consider whether the
documents so removed are, in his
opinion, relevant to the matters referred to in paragraph 1 above.
Mr RH Parker shall
complete his review within 24 hours of delivery to him of the
documents so removed by Mr Friedman.
Should a dispute arise
between Messrs Friedman and Parker regarding the relevance of any
document such dispute shall be referred
to this Honourable Court for
decision.’
Neither side pressed for any costs
order in respect of the application. That attitude was correct as
the application was no more
than part of the day’s proceedings
in the course of the oral hearing. In the result, no dispute arose
as to what documentation
should be discovered.
At the same time Belling, on behalf
of all of the respondents, made a new application for leave to call
witnesses without the
need to submit prior affidavits or statements
by them (which, it was said, could not be obtained). Two of the
witnesses referred
to, a Mr Nel and a Mr de Reuck, had, however,
deposed to affidavits filed in the proceedings on behalf of Gentech
and it was
accordingly open to the respondents, without an order
from me, to require their attendance in the witness box for the
purposes
of cross-examination, if that was a course the respondents
were advised to follow. The remainder of the application was in fact

a renewal of the applications made earlier by Mr
Friedman
in
respect of the witnesses Gomes and Booysen, to which a third name,
Britnor, was added. No basis for the grant of the relief
was laid
before me and the respondents were advised by me that if, in the
light of further developments in the hearing, they
were advised to
seek the presence of the witnesses in the witness box, they were
entitled to renew the application, with a proper
basis being laid
therefor. Accordingly, no order was made on the application. Again,
no costs order was warranted. (In the result,
although afforded an
opportunity later, the respondents did not renew the application).
The next interlocutory application
was brought by Gentech on 15 September 2010, for leave to call a Mr
Stuurman as a witness notwithstanding
that a summary of his evidence
was not made available within the time limit fixed by the court when
the matter was referred for
the hearing of oral evidence. In fact, a
copy of the witness’s statement was handed to the respondents
at the time the
application was moved. The application was formally
opposed by the respondents. I granted the application, but without
giving
reasons for my ruling. Those reasons, in brief, now follow.
Stuurman was an employee of
Transwerk, an entity specifically named in paragraph 2.3 of the
interdict order, as well as being
included in annexure “X”,
also dealt with in the same paragraph of the order.
In short, his evidence was to relate
to an alleged visit paid to him at his place of employment during
December 2008 by the first
three respondents and a fourth person
(whom Gentech alleged was Chellew), for the purposes of soliciting
business from Transwerk
for Ureflex. The alleged meeting was placed
in dispute.
The nature of the evidence had been
foreshadowed in the papers filed on behalf of Gentech in the
Anton
Piller
proceedings. And the respondents had also then put up
their counter to the evidence. In addition, the issue had also been
canvassed
during the part of the oral hearing that had taken place
prior to the application being brought, namely during the
cross-examination
of Belling, Chellew and Reddy.
Initially, Stuurman’s attitude
was that he was not prepared to make an affidavit or become involved
in the proceedings between
the parties, notwithstanding that he had
telephonically consulted with Mr Gough. Gentech’s attorney,
who had thereafter
addressed a letter to Stuurman recording the
content of the consultation. Thereafter, however, a subpoena was
served on him,
and shortly before the interlocutory application was
brought Stuurman relented and signified his willingness to testify
and favoured
Gough with the statement referred to above.
The objection of the respondents to
the grant of the application was simply the formal one that the time
period prescribed for
the furnishing of a witness statement had not
been complied with. The respondents conceded, however, that they did
not seek to
argue that the grant of the application would occasion
them any prejudice. I was satisfied that in the circumstances the
late
furnishing of the statement had been adequately explained, and
that in the light of the absence of prejudice to the respondents,

and the other history set out above, the interests of justice
required the grant of the relief sought by Gentech. No costs order

in respect of the application was sought or warranted.
On the same date, and despite
opposition by the respondents, I made a further order granting
Gentech leave to call a Mr Rudolph
notwithstanding that a statement
by him had not been furnished to the respondents. The reasons for
that ruling follow.
An affidavit by Nel was filed in
support of Gentech’s application. It was, in short, to the
effect that after Chellew had
given evidence, on 9 September 2010
(and Nel had formed the impression that Chellew had ‘attempted
to downplay his involvement
in the market for polyurethane
products’), Nel decided to have another look at the
documentation discovered pursuant to
the
Anton Piller
proceedings. A bank statement of Raytech (the vehicle through which
Chellew conducted business) reflected that in December 2008
a
payment of some R35 000,00 had been made to a firm styled Powertech
Calidus (Powertech), which carried on business in Johannesburg.
The
latter was a supplier of Gentech listed in annexure “X”.
As will appear later, it was part of Gentech’s
case that in
order to circumvent the interdict order the respondents had utilised
the services of Raytech as a front for Ureflex.
Nel contacted
Rudolph, a former employee of Powertech. He was advised that Zimmer
had telephonically contacted him at Powertech
with an enquiry about
a certain product (which Powertech was supplying to Gentech for
onward sale to other parties), and that
Zimmer had left Rudolph
under the impression that the enquiry was being made on behalf of
Gentech. Subsequently, Zimmer telephoned
him again to advise that an
order for the product would be placed by Raytech. This was done;
hence, the payment referred to earlier.
The above events were
recorded in an email addressed to Gentech on behalf of Rudolph on 13
September 2010.
The opposition to the grant of the
leave sought by Gentech was founded on a two-fold basis. First, it
was contended that Gentech
had been guilty of considerable delay in
securing the information in question – the investigation
required could have been
undertaken at the time access to the
Anton
Piller
documentation had been secured during March 2009. Second,
the possibility was posed of prejudice to the respondents should the

end-user of the product obtained by Raytech from Powertech not be
available to state whether or not Zimmer had been in contact
with
him.
Neither objection had merit. As Mr
Ford
sought to stress, the documentation disclosed pursuant
to the
Anton Piller
proceedings was voluminous, and no
weighty criticism was to be levelled at Gentech for its failure
earlier to pick up the payment
in question and the significance
thereof. In any event, the delay contended for was insufficient to
justify refusing Gentech
the leave it sought. Nor was I satisfied
that the possible prejudice contended for was present. Apart from
the speculative nature
of the non-availability of the end-user in
question I was persuaded that it would be neither here nor there
whether Zimmer had
been in contact with him or it.
The nature of the evidence to be
given by Rudolph (who, I was told, was reluctant to be involved in
the proceedings and would
have to be subpoenaed) was, in my view,
sufficiently foreshadowed in the email referred to above. In all the
circumstances the
interests of justice dictated that Gentech be
granted leave to call Rudolph as a witness. No costs order in
respect of the application
was sought or warranted.
The final interlocutory order I made
was pursuant to an application made by the respondents on the
morning of Monday 20 September
2010. Leave was sought to adduce
certain further oral evidence, including that of witnesses to be
recalled (in certain instances
without filing a summary of the
envisaged evidence), and, second, a postponement of the proceedings
was sought in order to afford
an opportunity to the respondents to
gather the evidence in question.
An immediate postponement was not
requested, however, as there was other evidence available that was
to be led. In fact, the day
was fully occupied and the matter was
then postponed to Wednesday 22 September 2010 – the next
witness, Friedman, was not
available on 21 September 2010. Judgment
on the application was reserved until 22 September 2010.
I granted only some of the relief
sought and reserved the issue of costs. I gave reasons at the time
for my rulings and it is
unnecessary to repeat same in this
judgment. I will merely record the relief that was granted.
I granted leave to the respondents
to recall Chellew, who had already testified, to the witness box
to give evidence bearing
on that given by Rudolph, who had been
called as a witness by Gentech.
Leave was granted for Zimmer, who
had already testified, to return to the witness box to canvas his
telephone records for
the period 1 – 12 December 2008.
Similar leave was granted in
respect of the recall of Reddy to the witness box to canvas the
telephone records of Ureflex
for the same period.
Similarly, leave was granted to
adduce the evidence of representatives of telephone companies
concerning certain relevant
telephone records (if need be, and
with my further leave, without the filing of affidavits by the
witnesses or summaries
of their evidence).
I subsequently amplified the orders
by giving directions for the furnishing of summaries relating to the
evidence to be given
of telephone records. In the result, the
further evidence tendered was that of Belling (
in lieu
of
Reddy) relating to Ureflex’s telephone records, of Zimmer
relating to his cellphone records, and of Chellew in response
to the
evidence given by Rudolph.
Friedman gave evidence on 22
September 2010 and Chellew was recalled to the witness box on the
following day. Thereafter the matter
was postponed to 25 January
2011. Both sides agreed that no question of costs arose. That
attitude was correct. The application
referred to above was properly
to be regarded as an integral part of the day’s hearing, and
the costs attendant thereon
were accordingly properly costs in the
cause. The hearing would not have been completed on 24 September
2010, the last day of
the third term, and the hearing would
therefore inevitably have had to be postponed. Therefore, no wasted
costs were occasioned
by the postponement.
Aspects to be proved
It is common cause that the interdict
order was granted and that the respondents received notice thereof.
It is in dispute, however,
whether Gentech established that the
respondents committed the breaches of the interdict order alleged by
the former, and same
had accordingly, to be proved by Gentech. If it
be found that Gentech discharged the onus resting on it in respect
of that proof,
the next enquiry would be whether the respondents
satisfied the evidentiary burden on them in respect of the
requisites of wilfulness
and
mala fides
(paragraphs 11
et
seq
above).
It is to be emphasised that it was
required of Gentech to establish a case against each of the four
respondents. However, where
applicable the principles of the
doctrine of common purpose would be operative – and it is
Gentech’s case that throughout
the respondents acted in
concert - and as regards Ureflex the maxim
qui facit per alium
facit per se
would also find application. In fact, subject to
one qualification, it was not placed in dispute that the first three
respondents
had throughout acted in concert and on behalf of
Ureflex. There was in fact evidence that the first three respondents
had entered
into a ‘partnership agreement’ in terms of
which they would conduct the affairs of Ureflex. The qualification
referred
to was founded on the allegation that at a certain stage
Zimmer dissociated himself from the common operation and withdrew
from
the activities of Ureflex, at least for a period of some
months. I will return to this issue when it becomes relevant for the
purposes of this judgment.
Aspects not constituting issues
It requires to be emphasised that the
enquiry with which the present proceedings were concerned was solely
whether the respondents
deliberately and wittingly acted in breach
of one or other of the provisions of the interdict order. The
proceedings were not
launched in order to secure the enforcement of
any restraint of trade covenants incorporated in the contracts of
employment the
first three respondents had with Gentech.
Accordingly, the fact that Mr
Ford
succeeded, during the hearing of oral evidence, in extracting
concessions from the respondents that their employment with Gentech

had been subject to restraint of trade provisions was neither here
nor there. It may be that in appropriate circumstances unlawful

competition is properly restrained by way of enforcement of a
restraint of trade provision. However, notwithstanding that the

interdict order, in paragraph 2.2, proscribed unlawful competition
by the respondents with Gentech, reliance on restraint of
trade
provisions did not form any part of the case made out by Gentech in
its papers.
Two allied aspects are the following.
First, a charge levelled by Mr
Ford
during cross-examination
of the first three respondents was that the latter, in participating
in certain of the transactions or
conduct that were the subject of
Gentech’s complaints, had utilised Gentech’s alleged
confidential information in
the form of the relationships that had
developed between Gentech and the customers/suppliers in question
(ie entities not listed
in annexure “X”), and had
therefore competed unlawfully with Gentech.
However, while, in appropriate
circumstances, relationships that a business had developed with its
customers/suppliers may constitute
protectable interests that would
justify the enforcement of a restraint of trade covenant, such
relationships (in contradistinction
to eg customer/supplier lists)
do not, in my judgment, constitute confidential information. And on
a proper analysis and interpretation
of the interdict order, the
intention thereof was not to protect relationships beyond those with
customer/suppliers indentified
in annexure “X”. Had a
blanket protection of all customer/supplier relationships been
intended the interdict order
would have been so worded. It matters
not therefore that it was conceded, notably by Zimmer, that
Gentech’s relationships
with its customers/suppliers
constituted part of Gentech’s confidential information.
Second, it was put to the respondents
by Mr
Ford
that their use at Ureflex of the skills and
know-how they had acquired during their employment at Gentech was a
breach of the
interdict’s prohibition against the use of
Gentech’s confidential information (ie apart from confidential
information
relating to eg Gentech’s designs, processes and
pricing structures), and, again, constituted unlawful competition.
However, counsel’s
propositions to the respondents were unqualified by a restriction to
skills and know-how that were not
in the public domain, but referred
to any skills and know-how the respondents acquired. There was also
no endeavour to show which
skills and know-how, if any, fell outside
the public domain. It is therefore appropriate to record that in
Automotive
Tooling
11
approval was given
to the following passage in
Aranda
Textile
:
12
‘
A
man’s skills and abilities are a part of himself and he cannot
ordinarily be precluded from making use of them by a contract
in
restraint of trade. An employer who has been to the trouble and
expense of training a workman in an established field of work
and
has thereby provided the workman with knowledge and skills in the
public domain
,
which the workman might not otherwise have gained, has an obvious
interest in retaining the services of the workman. In the eye
of the
law, however, such an interest is not in the nature of property in
the hands of the employer. It affords the employer no
proprietary
interest in the workman, his know-how or skills. Such know-how and
skills
in
the public domain
became attributes of the workman himself, do not in any way belong to
the employer and the use thereof cannot be subjected to restriction

by way of a restraint of trade provision. Such a restriction,
impinging as it would on the workman’s ability to compete
freely and fairly in the market place, is unreasonable and contrary
to public policy.’
The interpretation of the interdict
order must be in accordance with these principles.
Alleged deficient disclosure by the
respondents
Mr
Ford
sought to emphasise
that an analysis of the papers and evidence in the various
proceedings painted a clear and unambiguous picture
of persistent
reticence on the part of the respondents to play open cards with the
Court as to wrongdoing on their part, and
an attitude of
concealment, until, from time to time, further information placed
before the Court by Gentech, rendered disclosure
inescapable.
The effect thereof, so counsel
argued, was two-fold. The credibility of the respondents was exposed
as being seriously wanting.
Second, the attitude of the respondents
vis-à-vis
the Court revealed by their selective
candour, enjoined circumspection in the assessment of their claims
of
bona fides
in the matter of compliance with the interdict
order. In my judgment, the argument of counsel was well-founded.
Counsel invoked
inter alia
the aspects referred to in the
paragraphs that follow.
As recorded in paragraph 24 above,
Gentech, in launching the interdict proceedings, set out a series of
allegations against the
respondents which
inter alia
charged
the respondents with clandestinely setting up a new business, via
Ureflex, to operate in competition with Gentech, using
the latter’s
confidential information and trade secrets, and which they in fact
commenced operating prior to leaving Gentech’s
employ, as they
in due course intended to do; in short, a ‘springboarding’
exercise.
In the main answering affidavit,
dated 18 July 2008, deposed to by Belling, and confirmed by Reddy
and Zimmer, limited admissions
of alleged misconduct by them, and
breaches of their fiduciary duty towards Gentech, were made. It was,
however, averred that
Gentech had grossly exaggerated the position.
Belling stated in terms:
‘
I,
together with Reddy and Zimmer, am filing an affidavit making a full
and complete disclosure of all our activities to the allegations
of
unlawful behaviour and breach of fiduciary duty towards the
applicant.
………
I state categorically
that the truth of the matter is comprehensively set forth in this
affidavit.’
The respondents did not, however,
live up to these undertakings. What, in the main, was admitted, was
that preparations had been
set in train to go into business with two
other entities (in direct competition with Gentech), that business
from Cadbury (Nigeria)
was directed from Gentech to one of these
entities, that Reddy had removed a ‘tool kit’ of Gentech
(an integral part
of Gentech’s equipment), and that attempts
were made to secure custom from other clients of Gentech.
While it was admitted that Ureflex
had taken certain steps towards setting up the infrastructure to
enable it to commence business
(in competition with Gentech) and had
manufactured some samples, it was categorically denied that any of
the respondents had
as yet commenced trading and it was alleged that
Ureflex was in fact still dormant. Any other alleged unlawful
activity than
that set out in the answering papers was denied.
While giving evidence during the oral
hearing Belling was confronted with a document, dated 14 February
2008 and styled ‘START
UP/TIMING PLAN (annexure FA13 to the
founding papers in the Graymaur application). The document was one
of those discovered pursuant
to the
Anton Piller
proceedings.
In short, this document, of which Belling was the author, recorded
comprehensive proposals adopted by the first
to third respondents
concerning a time-table for various steps to be taken in respect of
the setting up of a business to compete
with Gentech. A paragraph
therein recorded the following:
‘
We
will have customer history, pricing structures and supplier
information presently utilised by Gentech.’
Under cross-examination Belling
admitted that he had thought of copying the information referred to,
which was on his computer
in his office at Gentech, but had decided
against doing so after receiving legal advice from Friedman that he
should leave Gentech
without taking anything with him. He claimed,
however, that, he having worked with the information at Gentech for
such a long
period, it was ‘in his head’. Be that as it
may. There was no mention in the answering papers in the interdict
proceedings
either that this information was ‘available’
to the respondents or that it was their intention to utilise same to
compete with Gentech (which, the document added, would have a
crippling effect on Gentech). This is fairly to be stamped as a

material non-disclosure. It may be noted that Belling further
conceded that he was not suggesting that Friedman advised him that

as long as he took no documentation away with him he was free to use
Gentech’s confidential information. His belated comment

thereafter that he did not consider the information to be
confidential to Gentech, carried its own refutation.
For the sake of completeness it may
be noted that the document revealed the first to third respondents’
plans to subvert
Gentech from within by, eg filching key staff and
securing the termination of agency agreements held by Gentech. The
plans were
characterised by their furtiveness and were labelled by
the respondents themselves as a ‘conspiracy’, and their
expectation
was that their envisaged conduct would be viewed as
‘springboarding, unfair competition, disclosure of
confidential information.’
After the answering papers in the
interdict proceedings were filed further information came to
Gentech’s attention. It was
discovered that the first to third
respondents had prior to their departure from Gentech
surreptitiously commenced steps towards
a detailed analysis and
comparison of Gentech’s profit/pricing structures. The
relevant documents were annexed to the replying
papers as annexures
“RA10” and “RA11”.
The second discovery was of a
computer disc in Belling’s office onto which, on Belling’s
instructions, a co-worker
at Gentech had down-loaded over 4000 of
Gentech’s drawings (annexure “RA1” to the replying
papers had reference).
Similarly, Belling caused one of Gentech’s
draughtsmen to prepare 23 drawings of parts manufactured by Gentech
(annexure
“RA4” to the replying papers).
In the light of the above Gentech
filed an amended, amplified, notice of motion which included a
reference to the annexures referred
to above as well as the
incorporation of new prayers 2.4 and 2.5 (and the order granted by
the Court followed suit).
In respect of annexures “RA10”
and “RA11” the first three respondents, in a fourth set
of affidavits,
admitted that they had busied themselves therewith,
during March/April 2008. It was alleged, however, that at about the
same
time relations with one of the other entities with whom the
respondents initially wished to join in a business to compete with

Gentech, deteriorated. On consulting with his attorney Belling was
advised that in the light of that development full information
of
the respondents’ plans would probably become available to
Gentech, and Belling was warned that the respondents should
conduct
themselves ‘correctly’. The documents prepared by the
respondents were accordingly returned to Belling’s
office
where they remained until the end of June, when, just before his
suspension, Belling allegedly made use thereof for another,

allegedly legitimate, purpose. The original failure to mention that
the respondents had busied themselves at all with the analysis
was
in itself a material non-disclosure. To the extent that the
respondents’ explanation set out above sought to reflect
that
consequent upon the advice from their attorney they had abandoned
their intention to utilise the analysis, it may be noted
that the
claim does not square with the fact that on 21 May 2008 Belling gave
an instruction to Mrs Rose-Innes (a credit controller
at Gentech,
who had been targeted by the respondents to join them in the
enterprise that was to compete with Gentech) to undertake
a
refinement of the analysis (annexures FA23-24 to the founding papers
in the Graymaur application have reference – documents

retrieved during the execution of the first
Anton Piller
order, and which also had not been the subject of earlier disclosure
by the respondents). During his oral testimony Zimmer admitted
that
he was aware of Belling’s analysis of the price structures
which would be useful in identifying the most profitable
products on
which to focus their envisaged business.
The earlier incomplete disclosure was
persisted in by the respondents in their answering papers in the A &
D application,
which were filed on 28 November 2008 (ie, before the
Anton Piller
proceedings were launched). In those answering
papers the respondents merely affirmed that the issue of Gentech’s
client
and supply lists had been dealt with by them in the interdict
proceedings.
During his oral evidence this issue
was again raised with Belling. Initially, he reiterated that in
doing the pricing analysis
he was legitimately doing work assigned
to him in his capacity as sales manager; he had commenced same in
December 2007 and had
not completed the task by June 2008.
Immediately thereafter, however, when pressed on this score, he
admitted that he had since
February been furthering the interests of
the business he was planning to enter, and that his alleged
legitimate ‘function’
‘ran in conjunction with the
bad things [he] was doing,’ and that he was killing two birds
with one stone. Belling
also confirmed that the following comments
made by Friedman to Mr Baker, the attorney for Volkswagen, in a
letter dated 13 May
2009, correctly reflected his, Belling’s,
instructions to Friedman: he, Belling had organised the departure
(ie of the
first three respondents from Gentech); instead of just
packing his bags and leaving, he had wanted to stay on at Gentech
for
a 6 month period whilst ‘he got his act together’ to
manufacture polyurethane products in competition (with Gentech);
he
did not need to take documents, information or anything, as it was
all stored in his head, as it was with the other two; nevertheless,

he had been caught red-handed.
Further oral testimony by Belling
during his cross-examination that was relevant to the aspects dealt
with above was the following.
The consultation with Friedman
referred to in paragraph 128 above arose out of the deterioration of
the relations between the
respondents and the other entities
referred to (who were the further parties cited by Gentech in the
interdict proceedings).
The advice received embraced the statement
that the dealings with the entities was unlawful and that the
copying of Gentech’s
documents for proposed use in the
business envisaged was likewise unlawful. Belling claimed that the
respondents then ceased
copying documents. However, Belling’s
oral testimony under cross-examination embraced the following
passage:
‘
And
what happened after your deal had gone bad with the [other entities]
was that you carried on, notwithstanding whatever advice
Mr Friedman
had given you about springboarding, to set up Ureflex in direct
competition with Gentech utilising the information
that was in your
head and on whatever documentation you had until you were caught out,
until you were stopped by reason of an interdict
in July and August
2008. You had no regard to Mr Friedman’s advice at all. Am I
right? --- Yes, you are right.
……
.
You knew it was unlawful
and you carried on and you did it anyway. Am I right? --- Yes.’
(It was then that Belling made the
averment referred to in paragraph 123 above, that he did not consider
the information to be confidential).
It was also in the answering papers
in the A & D application that the respondents first disclosed
(in answer to an allegation
on behalf of Gentech that they had
conducted a detailed analysis of Gentech’s price/profit range)
that an analysis was
prepared of items that were in a good profit
range. It was, however, claimed, unpersuasively, that nothing came
of the analysis
in that the allegedly half completed document was
left behind in Belling’s office when he left the employ of
Gentech.
In respect of annexures “RA1”
and “RA4”, the respondents did not dispute that Belling
had acquired the
drawings. The only response to Gentech’s
allegations on this score (which included the unchallenged statement
that one
of the drawings on annexure “RA4” was of a
chevron seal manufactured by Gentech for Transwerk, seals which a
video
taken at Ureflex premises on 1 July 2008 reflected were being
manufactured by Ureflex) was a claim (which was said to be
applicable
to the issue of the profit/pricing analysis as well) that
any confidential information that Belling may have had on his flash
drive or computer or elsewhere under his control had been deleted by
him. It was on that basis that the respondents offered their

restricted opposition to the amplified prayers in the amended notice
of motion, viz to the grant of prayer 2.5 thereof. Again,
in respect
of Belling’s doings with the drawings referred to there had
earlier been a material non-disclosure.
Further documents retrieved pursuant
to the
Anton Piller
proceedings, the contents of which were
not disclosed during the interdict proceedings (nor for that matter
during the A &
D proceedings), included
inter alia
the
following annexures to the founding papers in the Graymaur
application:
(a) annexure FA25, an e-mail, dated 20
June 2008, addressed by Belling to Mrs Rose-Innes, setting out a list
of Gentech’s
suppliers, together with details of their contact
particulars;
annexure FA18, dated 18 February
2008, an e-mail addressed by Reddy to Servochem (a supplier to
Gentech of chemicals used in
the production of polyurethane), in
which the former announced his intention of embarking on an
enterprise in which he would
duplicate the manufacturing processes
of Gentech, and requested information relating to the supply of
various items and materials;
annexure F19, dated 23 January 2008,
an e-mail from Belling to Reddy explaining how to cost the supply
of polyurethane products
to a particular Gentech customer (which
had not been allocated by Gentech to Reddy);
annexures FA20-22, e-mails sent by
Belling to Reddy on various dates between February and March 2008,
setting out lists of Gentech’s
supply of products to
customers during the preceding 12 month period, and a costing sheet
in respect of polyurethane products
(of which Reddy had no need in
order to perform his duties with Gentech.)
As to the assertion by the
respondents that Ureflex had not yet commenced trading, the
following further documents annexed to
the founding papers in the
Graymaur application (and also seized during the execution of the
first
Anton Piller
order) established the contrary: annexures
FA26-41, bearing dates between May to July 2008, being till slips,
order forms and
invoices in respect business expenses incurred by or
on behalf of Ureflex (including acquisitions of office equipment and
entertainment
expenses), quotations, order forms, invoices and
statements of account in respect of the supply by Ureflex of
polyurethane products
to various customers or suppliers of Gentech.
In his oral evidence Belling was constrained to concede that it was
wrong of him
to have earlier stated that Ureflex was dormant. He
sought to explain his earlier statement that Ureflex had not
commenced trading
by saying that he should have referred to
‘structured trading’. He had difficulty in explaining
what this phrase
was intended to convey. It was clear that he was
trifling with the court and attempting to mislead me.
As will be set out later, at least as
from 15 July 2008 Ureflex was actively engaged with Graymaur (an
entity listed on annexure
“X”) in respect of the
intended supply by the latter to Volkswagen (also an entity listed
on annexure “X”)
of polyurethane products. No disclosure
of those activities was initially made by the respondents. Documents
relating thereto
were recovered pursuant to the
Anton Piller
proceedings.
Demeanour of the witnesses who gave
viva voce evidence.
I will later in this judgment have
occasion to consider various other aspects arising out of the
content of the testimony given
during the hearing of oral evidence
which have a bearing on the credibility of the respective witnesses.
At this stage I would
record some brief comments on the narrow
question of the demeanour of the witnesses in the witness box. In
doing so I do not
lose sight of the oft-quoted dictum that demeanour
is a tricky horse to ride and is no guarantee of either the
witness’s
reliability or the lack thereof. More important is
the content of the witness’s testimony seen in the light of
the totality
of the evidence and the probabilities emerging
therefrom. Nevertheless, I record the following comments.
The three witnesses who testified on
behalf of Gentech, Nel, Stuurman and Rudolph, all created a
favourable impression on me.
The first two answered the questions
put to them in a straightforward and candid manner and presented as
credible witnesses.
Rudolph was on occasion a confusing or confused
witness, but on the essence of his evidence he stood firm and on
that score he,
too, presented as a credible witness. Belling, Reddy
and Zimmer were each somewhat loquacious and at times difficult to
understand,
and Zimmer was an uncomfortable witness (possibly due to
his nervous disposition). More important is the fact that at times
each
was an evasive and contradictory witness (to which may be added
that it was clear at times that they wittingly gave false evidence).

Myburgh was at times a vague, evasive and contradictory witness.
Chellew was an unsatisfactory witness, evasive, belligerent
and
argumentative. Friedman was at times argumentative (possibly due to
the fact that he was the respondents’ legal advisor).
The A & D application
As recorded earlier (paragraph 33
above), the dispute between the parties centred around the supply of
anti-vibration foot-mounts
by Ureflex to A & D.
Were commercial dealings
simpliciter between the respondents and A & D prohibited by the
interdict order?
Part of the case sought to be made
out by Gentech in its founding papers was that A & D was one of
the clients of Gentech
that the interdict order prohibited the
respondents from dealing with. It was averred that all of the
respondents were aware
of this, particularly Zimmer in that whilst
in the employ of Gentech he was allocated A & D as a customer.
It was also alleged
that A & D was listed in annexures “X”
and “RA1”.
The above contention of Gentech was
misplaced. A & D was in fact not listed on annexure “X”
(which was a list
found on Belling’s computer and which
Gentech incorporated in its founding papers). Nor did annexure “RA1”

purport to identify A & D – it was merely a list of a
substantial number of drawings identified by the numbers allocated

to them, but the corresponding names (of clients) to which the
respective drawings related had earlier been deleted from the

annexure on behalf of Gentech on the basis that they constituted
confidential information. Accordingly, as contended by the
respondents, the mere fact that the respondents dealt with A &
D, albeit a customer of Gentech, did not constitute an infraction
of
the interdict order. For the sake of completeness, if may be
recorded that the legal advice received by the respondents from

Friedman was to the effect that they were free to do business with
any entity that was not listed on annexure “X”,
albeit
it was a customer of Gentech, provided they did not do so
unlawfully, ie by utilising Gentech’s confidential
information.
This conclusion is not affected by
the following facts, which were common cause:
(a) In omitting the name of A & D
(and indeed a host of other names) annexure “X” was
incomplete in that there was
a business relationship between A &
D and Gentech, the former having been from time to time a purchaser
of a variety of polyurethane
and other products from the latter,
including foot-mounts which A & D would supply to its customers.
(b) Some of the drawings reflected on
annexure “RA1” specifically related to products for A &
D, including foot-mounts,
and on the original of the annexure the
names of Gentech’s relevant customers, including A & D,
were reflected opposite
the numbers of the individual drawings.
Did Ureflex indirectly deal with a
Gentech customer listed in annexure “X”?
It was also (finally) not in dispute:
(a) that an entity styled
Bridgestone/Firestone (Bridgestone) was a customer of Gentech that
was listed in annexure “X”,
and that amongst the products
directly supplied by Gentech to Bridgestone were foot-mounts;
that a further drawing on annexure
“RA1” (identified therein by its number, 08-0319-02A1,
on page 635 of annexure
“RA1”) related to a loose bolt
foot-mount supplied by Gentech to Bridgestone;
that amongst the customers to which
A & D supplied foot-mounts was Bridgestone;
that the foot-mounts supplied by
Ureflex to A & D were required by the latter for onward supply
to Bridgestone.
In its founding papers Gentech
en
passant
made reference to the fact that the items supplied by
Ureflex to A & D were destined for Bridgestone. However, the
case was
not made out in the founding papers that because
Bridgestone was listed in annexure “X”, the respondents
had in the
circumstances breached the interdict order, albeit
indirectly. The averment that the respondents had infringed the
interdict
order in that they had contacted or solicited Gentech’s
‘clients, agents and suppliers’ was in the context

related only to the fact that the respondents had dealt with A &
D (a contention that I have already recorded was misplaced).
It was only in Gentech’s
replying papers that an allegation, premised on the fact that the
respondents were aware that the
product they supplied to A & D
was for the benefit of Bridgestone, was made that the respondents
had thus ‘
indirectly dealt with one of
[Gentech’s] customers listed in annexure “X”’
.
It was not permissible for Gentech to
invoke this cause of action for the first time in its replying
papers. Nor did Nel, in the
course of his oral evidence seek to
pursue the point. In any event, I am persuaded that the respondents’
answer adequately
met the point. It was averred that A & D was a
supplier to the tyre industry as a whole and sourced their
manufactured products
from a myriad of engineering/sales concerns.
That was why (as will appear below) both Gentech and Ureflex were
asked to quote
in respect of the foot-mounts required by A & D.
The supply of foot-mounts to A & D by Ureflex was pursuant to a
relationship
that came into being when the former approached the
latter in connection therewith. There was no conspiracy between
Ureflex and
A & D (in respect of a circumvention of the
interdict order). That Bridgestone was to be the end-user was
therefore neither
here nor there. It was in fact not the case that
Gentech sought to make out that there had been a joint endeavour by
the respondents
and A & D to circumvent the court order.
Gentech’s remaining case
The remainder of Gentech’s case
related to the issue whether in manufacturing and supplying the
foot-mounts to A & D
the respondents had breached the provisions
of paragraph 2.1 (read with paragraphs 2.1.1 and 2.1.3) and/or
paragraph 2.2 of the
interdict order in that they used Gentech’s
confidential information relating to its designs/drawings and/or
pricing structures,
and thereby competed unlawfully with Gentech.
Gentech adduced the evidence of Nel,
a member of Gentech, who both deposed to affidavits and testified at
the oral hearing. Confirmatory
affidavits by other employees of
Gentech were filed. The respondents relied on an affidavit by
Belling (confirmed by Reddy and
Zimmer) and also
inter alia
an affidavit by Mr Myburgh, the project manager of A & D’s
press shop, as well as the oral evidence of Belling, Reddy,
Zimmer
and Myburgh.
Gentech’s factual evidence in
its founding papers proceeded as follows. During September 2008
Myburgh approached Gentech,
and spoke to de Reuck in connection with
the supply of foot-mounts. He brought with him ‘
a
sample of anti-vibration footpads which [Gentech] had manufactured
for Bridgestone in April 2008’
. In previously
manufacturing and supplying foot-mounts to A & D Gentech had
modified its design for Bridgestone (the reference
being to the
drawing referred to in paragraph 143(b) above).
Myburgh, who needed the foot-mounts
urgently, placed an order (to be executed immediately) for 16 of the
foot-mounts, and requested
that a (formal) quotation be sent to A &
D to complete the paperwork. The quotation, sent on 3 October 2008,
reflected a
unit price of R325,00. The foot-mounts were in fact
manufactured thereafter. However, Ureflex had, on 7 October 2008,
also submitted
a quotation to A & D reflecting a unit price of
R295,00, which had been prepared by Zimmer. In the result, A & D
did
the business with Ureflex.
As indicated earlier, it was the
remaining contention of Gentech in its founding papers that Ureflex,
in manufacturing and supplying
the foot-mounts to A & D, had, in
breach of the interdict order, unlawfully utilised Gentech’s
confidential information,
namely its drawings, designs and
pricing/profit structures, and accordingly at the same time competed
unlawfully with Gentech.
Nel explained in the founding affidavit
that the drawing in question was confidential, and accordingly a
copy thereof was not
annexed to the founding papers.
The following may be noted. In
addition to mentioning the sample brought by Myburgh and the drawing
referred to in paragraph 143(b)
above, Gentech’s founding
papers further stated that the drawing reflected the subtle
modifications effected thereto pursuant
to specific design
requirements of A & D. No further elucidation of the foot-mounts
supplied by Ureflex to A & D was
furnished or, save as set out
below, of the basis on which the manufacture and supply thereof was
allegedly an infraction of
Gentech’s interests in its
confidential information, designs and pricing/profit structure, as
protected by the interdict
order. Gentech contented itself with an
averment of an inference to that effect, based on the allegations
set out earlier plus
the further allegation that the drawing
contained all the specifications of the foot-mounts and was
necessary for the manufacture
thereof. (It became clear that, as
pointed out by the respondents, Gentech’s papers in the
application were filed prior
to anyone from Gentech having seen the
foot-mounts supplied by Ureflex to A & D).
The respondents’ answer
While admitting Gentech’s
prefatory allegation that during their employment at Gentech the
first to third respondents had
access to, and came into possession
of, Gentech’s trade secrets and confidential information, the
respondents firmly disputed
the contentions of Gentech referred to
above.
The answering papers sought to
counter Gentech’s contentions on a number of fronts. The first
answer was historical in nature.
It was to the effect that what was
referred to as ‘the vibration foot-mount manufactured by
Gentech’, was not its
own design. Instead, as foreshadowed in
paragraph 77 above, it was alleged that a Gentech client had handed
a foot-mount to Reddy
that had been manufactured by an overseas
entity, styled Ashton Seals, with the request that Gentech
manufacture a replica. Reddy
did duplicate the product (allegedly
without deviation) and prepared the drawing thereof, which, as it
was further alleged, was
the drawing relied upon by Gentech.
Accordingly, Gentech’s ‘design’ and the drawing
thereof did not represent
a unique design that was protected by the
interdict order. (As will appear below, the Gentech foot-mount in
question was a fixed
bolt one).
An allied aspect was the averment by
Belling that the article supplied by Ureflex to A & D was in any
event cognizably different
from the article previously supplied by
Gentech to A & D, for onward supply to Bridgestone, more
particularly in that the
former had a loose bolt whereas the latter
had a fixed bolt (a modification that was effected because Myburgh
had requested same).
Gentech had in fact never supplied A & D
with any foot-mount with a loose bolt. Ureflex had accordingly not
utilised Gentech’s
design or drawing. He added that Reddy had
prepared a drawing in respect of the foot-mount Ureflex would be
making and supplying
to A & D. A copy of the drawing would,
however, not be annexed to the respondents’ papers (allegedly
for fear of Gentech’s
fabricating a false drawing for the
purposes of the litigation).
According to the respondents the
other
differences between the foot-mount supplied to A &
D and that previously supplied by Gentech for onward supply to
Bridgestone
were the following: The ‘thickness’ was
different; the size of the bolt was different, being 24mm and 16mm,
respectively;
the ‘contours’ were different.
It was further alleged that Ureflex’s
original quotation to A & D had been R345,00 per unit (in regard
to which the
comment was made that the quotation was in fact more
than the quotation submitted by Gentech). At Myburgh’s request
that
Ureflex ‘sharpen its pencil’, it submitted a
revised quotation of R295,00 per unit. Its quotations had not been
influenced
by Gentech’s pricing structures. It was then added
that in fact Gentech’s pricing structure was in the public
domain
in that same was available on Gentech’s website. And,
in fact, the price for Gentech’s foot-mount listed on the
website
was R395,00 per unit.
The contract with A & D had come
about as follows. Myburgh approached Reddy for a quotation on
anti-vibration foot-mounts.
He furnished Reddy with a sample of a
foot-mount (with a fixed bolt that had broken off at the point of
entry into the housing),
that had been manufactured by Gentech, to
illustrate why he needed a different type of foot-mount, ie one with
a loose bolt.
Reddy referred him to Zimmer. In his discussions with
Zimmer he explained that the foot-mount supplied to A & D by
Gentech
was not acceptable, in that the bolt was fixed to the
mounting, and any movement rendered the bolt liable to break. He
accordingly
required Ureflex to manufacture a loose bolt foot-mount.
He further specified that the foot-mount have a ‘one inch BSW

thread’ (the reference apparently being to the diameter of the
bolt, and accordingly the recess in the mounting that would
house
the bolt required to be of a compatible diameter). Subsequently, at
the request of Zimmer, the ‘thread’ of
the foot-mount to
be supplied was changed to 24mm. Myburgh also conveyed other
specifications to Zimmer.
In his affidavit Myburgh confirmed
that he had the discussions with Reddy and Zimmer referred to in the
preceding paragraph (save
that he made no mention of other
specifications than the loose bolt and the diameter of the thread).
He also recorded that he
had earlier furnished the same explanation
to de Reuck, the representative of Gentech with whom he dealt, as to
why he required
a foot-mount with a loose bolt. He denied, however,
that he had in fact placed an order with Gentech, and averred that
he had
merely asked for a quotation. (This last dispute does not
require resolution). He further confirmed the evidence of the
respondents
in respect of the quotations submitted by Ureflex to A &
D.
Myburgh listed what he termed the
further differences between the two foot-mounts in question, ie
apart from the bolt being a
loose one, as follows: the Gentech
foot-mount had contours/ridges at the bottom, whereas the Ureflex
one was flush (the reference
being to the base); the Gentech
foot-mount was galvanised whilst the Ureflex one used ‘raw
materials’; the dimensions
of the foot-mounts differed
materially in thickness and look.
Gentech’s reply
The replying affidavit filed on
behalf of Gentech was again deposed to by Nel. As will appear below,
it furnished a measure of
clarification, as well as correction, of
aspects canvassed in the founding papers.
In the first place, it was
unequivocally stated that Gentech had designs for both a fixed bolt
as well as a loose bolt foot-mount.
It was denied that Gentech had
copied the design of its fixed bolt foot-mount from an article
produced by the overseas entity
styled Ashton Leads. Reddy and
Belling had in fact designed the foot-mount and had overseen its
manufacture.
Reddy and Belling were still in the
employ of Gentech when, during March 2008, Gentech designed a loose
bolt foot-mount for Bridgestone,
and supplied it during April 2008
to Bridgestone. Zimmer, who was servicing both Bridgestone and A &
D, had in fact attended
to the sale of these foot-mounts to
Bridgestone. (It will be remembered that in the answering papers of
the respondents the only
reference to the issue whether Gentech had
earlier dealt in loose bolt foot-mounts was the averment that
Gentech had never before
supplied a loose bolt foot-mount to A &
D. The question whether Gentech had supplied other customers with
such foot-mounts
was not adverted to).
The relevant drawing of Gentech which
related to the loose bolt foot-mount to be supplied to Bridgestone,
was the drawing referred
to in paragraph 143(b) above. A copy
thereof was annexed to the replying papers as annexure “R1”.
It reflected that
it was drawn by one C Davis on 19 March 2008, and
related to a product to be made for and supplied to Bridgestone.
(Incidentally,
it is clear that this drawing, which is the one on
which Gentech founded part of its case, was not the one that Mr
Friedman
, in moving one of the interlocutory applications
discussed earlier in this judgment, stated Reddy would claim had
been prepared
by Gomes (paragraph 77 above)).
When Myburgh approached Gentech
during September 2008 the sample that he made available was in fact
a fixed bolt foot-mount that
Gentech had produced for Bridgestone (a
drawing of which was included in annexure “RA1”). He
stated, however, that
he wished to have a loose bolt foot-mount (the
bolt to be supplied with the foot-mount) which was to be precisely
in accordance
with the design of the product which Gentech had
supplied to Bridgestone since April 2008, save that the diameter of
the recess
in the housing (to house the bolt) should be altered from
18mm to 25mm. De Reuck had sourced the relevant drawing (the one
referred
to in paragraph 143(b) above) and effected the modification
thereto requested by Myburgh. This modification had been effected
manually as reflected in the copy of the drawing annexed to the
papers.
It appears therefore that Gentech’s
founding papers, insofar as they embraced the factual averments
recorded in paragraphs
149 and 152 above, were in certain respects
inaccurate and incomplete. There had been a failure to reflect that
the sample that
Myburgh had made available was of a fixed bolt
foot-mount previously manufactured by Gentech for Bridgestone (and
in fact reference
had been made to a sample of the foot-mount which
Gentech had manufactured for Bridgestone in April 2008, which was in
fact a
loose bolt foot-mount) or to state that what Myburgh wanted
was a loose bolt foot-mount, (save that there was a reference to the

foot-mount manufactured in April 2008). (In fact, the sample made
available to both Gentech and Ureflex was exhibit 2, the

polyurethane base of a foot-mount with part of the
(fixed) bolt
which had broken off still embedded therein). It had been wrongly
stated that Gentech had modified its design for
Bridgestone when it
had previously supplied foot-mounts to A & D, whereas the
reference should have been to the modification
which Myburgh desired
should be effected to the article that Gentech would still have to
supply. It had not been made clear that
the drawing in question
related to the loose bolt foot-mount that Gentech had supplied to
Bridgestone (and to which Myburgh required
a modification). It is a
fair inference that the above features were attributable to
misunderstandings between Gentech and its
attorneys.
Nel contended, initially, that the
only difference between the loose bolt foot-mount previously
designed and supplied to Bridgestone
by Gentech and the article
supplied by Ureflex to A & D was that the diameter of the recess
had been increased from 18mm
to 25 mm. The inference is that, not
having seen either the article itself or a drawing thereof, Nel had
in mind that Ureflex’s
article was also to be in accordance
with the instructions given by Myburgh to Gentech. He later adverted
to the allegation by
the respondents relating to ‘contours’
(Myburgh referred to ‘contours/ridges’), and pointed out
that
the contoured/ridged polyurethane base of the foot-mount
manufactured by Gentech required a specific mould which was
time-consuming
and costly to manufacture (and he ventured the
opinion that the respondents had opted for the cheaper flat base
because of financial
constraints). He further averred, however, that
the difference relating to the diameter of the recess was a minor
one, to the
extent that it could be endorsed on the drawing in
manuscript and no modification of Gentech’s tooling was
required to
accommodate the change. He contended further that the
modifications did not materially change the nature, purpose and,
most importantly,
the fundamental design of the product or the
drawing.
Nel amplified his earlier contention
that, in order to manufacture the items it supplied to A & D,
Ureflex must have utilised
Gentech’s drawing, by adding the
alternative that Ureflex could not have produced the items to be
supplied to A & D
without having had regard to the sample
produced to it by Myburgh, which, Nel sought to emphasise, Ureflex,
on its own showing,
knew had been manufactured by Gentech, and had
been supplied
inter alia
to Bridgestone.
With respect to the respondents’
claim that in dealing with A & D it had not had regard to
Gentech’s pricing structures,
Nel made the following
averments. First, the respondents were wrong in asserting that
Gentech’s pricing structure was freely
available by way of
accessing Gentech’s website. In fact, the respondents were
aware that, for the protection of Gentech’s
highly
confidential information pertaining to
inter alia
its
pricing, access to its website was restricted to only authorised
employees and customers. Only authorised users to whom a
password
had been assigned were permitted to access such information. Belling
was a registered user who could access the pricing
structure on the
website.
Second, Nel adverted to the fact that
Ureflex, through the other respondents, knew that the price quoted
in the website for a
foot-mount with a fixed bolt was R395,00.
Hence, so he contended, their undercutting price of R345,00. What
they were apparently
unaware of was that Gentech’s quotation
of a price of R325,00 per unit was in respect of the foot-mount
sans
bolt. When they ‘sharpened their pencil’ at the behest
of Myburgh they came up with the further undercutting price
of
R295,00 (inferentially, so it was contended, having then been made
aware of the receipt by A & D of a quotation of R325,00
per unit
from Gentech).
Accordingly, so the contentions
continued, in manufacturing and supplying A & D with foot-mounts
the respondents had utilised:
(a) Gentech’s drawing of a loose
bolt foot-mount supplied to Bridgestone, a drawing included in
annexure “RA1”,
alternatively, had utilised the design
of Gentech’s foot-mount, made available to them by Myburgh (a
drawing of which was
also included in annexure “RA1”);
(b) Gentech’s pricing structure.
In either case, the respondents had
breached the terms of the interdict order, namely, firstly, the
provisions of paragraph 2.1,
read with paragraphs 2.1.1 and 2.1.3
thereof (relating to Gentech’s confidential information and
documentation concerning
designs or pricing structures, as the case
may be) and, secondly, the provisions of paragraph 2.2 thereof
(relating to unlawful
competition).
Further papers filed by the
respondents
In a fourth set of affidavits the
respondents enclosed the drawing alleged to have been made by Reddy
relating to the foot-mount
supplied by Ureflex to A & D.
Belling, the deponent to one of the
affidavits, now comparing Reddy’s drawing with that of Gentech
relating to its loose
bolt foot-mount, listed a number of
differences between the two. The respondents further filed an
affidavit by a Mr Exley, a
mechanical engineer, who also tabulated
differences between the two drawings, which substantially coincided
with those mentioned
by Belling. Exley’s wording is easier to
understand and the tabulation set out below largely follows that
wording. In the
tabulation the letter ‘(a)’ has
reference to the foot-mount manufactured by Ureflex and the letter
‘(b)’
to Gentech’s item. It may be pointed out
that Exley recorded that what was made available to him was not only
the drawing
by Reddy referred to in the preceding paragraph as well
as the drawing of Gentech referred to in paragraph 143(b) above, but

also physical examples of the Ureflex and Gentech loose bolt
foot-mounts. (As will appear below, during his oral evidence Nel
disputed that Exley could in fact have had regard to a physical
example of the loose bolt foot-mounts manufactured by Gentech
for
Bridgestone. Be that as it may.)
The tabulated differences were the
following:
Bolt size:
24mm;
20mm.
Location points between bolt and
recess:
Shapes on both, hemispherical;
Shapes on both, flat.
Metal housing containing recess:
Flat and of mild steel;
Conical and plated.
Connection between polyurethane base
and metal housing:
Bonding;
Base fastened in metal housing
recess by means of screws.
Shape of polyurethane base:
Flat;
Ridged (or contoured).
Overall dimensions different.
Accordingly, so it was contended, this
comparison indisputably revealed that, other than serving the same
purpose, the article produced
by Ureflex bore no relation to the item
manufactured by Gentech. It was further averred that because the
price of a polyurethane
product was dependent on the volume of
polyurethane involved, the flat base version was in fact more
expensive to produce.
To meet Nel’s averments
concerning Gentech’s website it was alleged that after the
commencement of the proceedings
in the A & D application an
acquaintance of Reddy, using the alias ‘
Kobus Greyling
’,
had accessed Gentech’s website and retrieved the pricing
information therein adverted to by the respondents in
their
answering papers. Each person logging into the website has to
furnish his specific identity and Gentech could establish
the time
and date when ‘
Kobus Greyling
’ accessed the
website.
Hearing of oral evidence
In respect of the A & D
application it is necessary only to have regard to those aspects
canvassed during the hearing of oral
evidence that are dealt with
below.
The alleged use of Gentech’s
pricing structures
The evidence of Reddy was that on his
request an acquaintance of his sought access to Gentech’s
website after the launch
of the A & D application, the
acquaintance succeeded in doing so by going onto the internet and
filling in his credentials
(using the alias ‘
Kobus
Greyling
’), whereafter he was electronically furnished
with a password that enabled him to access the website and retrieve
information
concerning Gentech’s pricing structure. In other
words, a password was there for the asking.
In his oral testimony Nel repeated
that a password was needed to gain access to the pricing structure
on Gentech’s website.
However, in contradistinction to his
statement in the papers that Belling was a registered user who could
access the pricing
structure on the website, his oral testimony was
that he did not know whether any of the first three respondents were
able to
access that part of the website that embraced the pricing
structure.
I do not find it necessary to decide
whether Reddy was correct in this assertion that a password was, as
it were, automatically
furnished to anyone requesting same. The fact
remains that on Reddy’s version there was a process that had
to be followed
in order to obtain a password to enable access to the
pricing structure on the website. I will further assume, without
deciding,
that because of the necessity for that process to be
followed the pricing structure was not in the public domain and was
therefore
confidential to Gentech.
It should also be recorded that Nel’s
oral evidence concerning the basis of Gentech’s quotation of
R345,00 per unit
differed from the explanation put forward in the
papers. In contradistinction to the latter explanation (that the
quotation was
for the supply of a foot-mount without a bolt) he
testified that the employee who had fixed the price of R345,00 per
unit had
lost sight of the fact that the quoted price was to cover
not only the foot-mount but the bolt as well and had therefore not

allowed for the price of the bolt.
The oral evidence tendered by the
respondents was, first, that the website pricing structure had not
been accessed by them and,
second, that no regard was had to
Gentech’s pricing structure when Ureflex favoured A & D
with quotations in respect
of the foot-mounts required by Myburgh.
Instead, Ureflex undertook its own costing exercise.
I have already recorded that as
witnesses the first three respondents fell to be severely
criticised. I therefore approach their
evidence with circumspection.
There is, secondly, reason to view the evidence that no regard was
had to Gentech’s pricing
structure when quoting on the supply
of the foot-mounts in question to A & D, with cognizable
suspicion. The proposition
that it was purely coincidental that
Ureflex’s first quotation was less than Gentech’s
website price for its fixed
bolt foot-mount and that the second
quotation was less than the price quoted by Gentech to A & D is
not an attractive one.
Thirdly, there was in fact no practical
reason why the respondents should not have had regard to Gentech’s
pricing structure.
However, it was Gentech’s case
that the first three respondents were
inter alia
privy to
confidential information of Gentech relating to its pricing
structure and the further evidence was that the respondents
had
busied themselves with an analysis thereof before leaving the employ
of Gentech. It was also the evidence of Belling that
by virtue of
his lengthy employment with Gentech the pricing structure was ‘in
his head’. It would seem therefore
that there was in fact no
need for the respondents to access the website to obtain information
about Gentech’s price for
its foot-mount. I am therefore
unable to reject the evidence that the respondents did not access
the website.
Secondly, the respondents were
capable of conducting their own costing and pricing exercise without
in fact having regard to Gentech’s
pricing structure. It was
stated under oath that that is just what they did. It was also
denied that the respondents became aware
of the actual price quoted
by Gentech to A & D. While Myburgh, in exhorting Ureflex to
‘sharpen its pencil’,
could have disclosed the price
quoted by Gentech, it was not his evidence that he did so.
Notwithstanding the strictures I have
passed on the credibility of
the first three respondents, including that they revealed themselves
as being quite ready to be
less than candid with the court, and in
fact to mislead me, I have come to the conclusion, not without a
measure of hesitancy,
that I am unable to reject the defence
evidence in question. To that extent I hold that Gentech failed to
discharge the
onus
resting on it of establishing that the
respondents breached the provisions of paragraph 2.1 read with
paragraph 2.1.3 of the
interdict order by making use of Gentech’s
confidential information relating to its pricing structure.
Comparisons between Ureflex’s
foot-mount and the foot-mounts of Gentech
Before I address the evidence bearing
on this issue, it is necessary that a few preliminary aspects be
considered. The first relates
to exhibit 4, Gentech’s fixed
bolt foot-mount, and the drawing thereof, which was one of the
drawings embraced in annexure
“RA1”.
It will be remembered that the
respondents’ case as to the authorship of the drawing was
contradictory. In the affidavits
the averment was that it was Reddy
who prepared the drawing (paragraphs 79 and 154 above). In his
argument in support of one
of the interlocutory applications made by
him Mr
Friedman
stated that Gomes prepared the drawing on the
instructions of Reddy, who thereafter approved the drawing. (This is
the version
that Reddy preferred in his oral evidence).
I was not able to understand the
basis of the allegation by Belling and Reddy that Gentech’s
‘design’ and the
drawing thereof did not represent a
unique design that was protected by the interdict order. In the
first place, it mattered
not what their views on this score were.
The drawing was included in annexure “RA1” and that put
an end to the question
whether it was protected by the order or not.
Secondly, even if the clone allegedly produced by Reddy was an exact
replica of
an article made available to Reddy by a customer, a
drawing of the replica was essential for the production of the
foot-mount.
That drawing (whether done by Reddy and/or Gomes) was
one produced by Gentech. It was therefore not to be gainsaid that it
was
a drawing that was confidential to Gentech.
But it transpired that in fact the
statement by Belling and Reddy in their affidavits that Reddy cloned
an exact replica, with
no deviation (exhibit 4), of the article made
available to him (exhibit 1) was untrue. In their oral testimonies
both Belling
and Reddy stated that they changed the design: (a) in
exhibit 1 the fixed bolt is screwed into the housing; in exhibit 4
the
bolt goes through the housing and is imbedded in the
polyurethane base; (b) the diameters of the polyurethane base and of
the
metal housing of exhibit 4 are bigger than those of exhibit 1;
(c) the polyurethane base of exhibit 1 fits into the housing recess

and is bonded to it whereas the base of exhibit 4 fits loosely into
the housing recess and is not bonded to it; (d) in exhibit
1 the
housing (or shroud) is a casting; the housing of exhibit 4 is
machined steel; (e) the side of the housing of exhibit 1
tapers; the
housing of exhibit 4 does not; (f) the housing of exhibit 1 is
painted; the housing of exhibit 4 is not; (g) on both
the housing
and the base of exhibit 1 there is a logo; exhibit 4 has no logo.
Gentech’s drawing is of the changed version,
exhibit 4, and to
that extent it is manifestly unique and confidential. I agree,
however, with the further comment of Belling
that for all practical
purposes exhibit 4 is a copy of exhibit 1.
In my judgment, the respondents are
to be severely criticised for framing their original answering
papers on the basis that a
comparison had to be made only between
the article manufactured by Ureflex and supplied to A & D and
Gentech’s fixed
bolt foot-mount, for making the related
comment that Gentech had never supplied a loose bolt foot-mount to A
& D, and for
omitting any reference to the fact that Gentech
manufactured a loose bolt foot-mount for Bridgestone and supplied
same to it.
The answering papers were nothing less than a calculated
attempt to mislead me (the respondents having seized upon the
unclear
and incomplete nature of the founding papers). It later
became clear that it was not in dispute, firstly, that Gentech had
designed
the loose bolt foot-mount (exhibit 5) for Bridgestone, that
it had produced a drawing for it, as referred to in paragraph 143(b)

above, and had since April 2008 been supplying same to Bridgestone,
and, secondly, that the first three respondents had throughout
been
aware of all those facts. To complete the above discussion: Belling
sought at one stage to suggest, and initially he was
adamant in the
contention, that the drawing referred to in paragraph 143(b) above,
was of a foot-mount with a fixed bolt. Ultimately,
however, he was
constrained to concede unequivocally that the drawing related to a
loose bolt foot-mount.
I turn now to consider the
differences between exhibit 3 and 5 (the loose bolt foot-mounts of
Ureflex and Gentech, respectively)
which were invoked by the
respondents as proof that their manufacture for, and supply to, A &
D of exhibit 3 did not constitute
a breach of the interdict order.
The differences are those tabulated in paragraph 175 above.
In my judgment, the comment at the
end of paragraph 189 above (that despite the differences between
exhibit 1 and 4 the latter
is for practical purposes a copy of the
former) may be restated in respect of the two loose bolt
foot-mounts: despite the differences,
for practical purposes they
are similar.
As recorded earlier, Myburgh did not
in his supporting affidavit confirm that he furnished Ureflex with
any further specifications
other than that the foot-mount to be
supplied should be a loose bolt version and that the diameter of the
bolt and recess be
of the size stipulated by him. Neither did he in
his oral evidence seek to say anything different. So also, neither
Belling nor
Reddy nor Zimmer sought to aver in their oral testimony
that Myburgh had stipulated or requested that the other changes in
question
be effected (and on the contrary, Zimmer pertinently
testified that all that Myburgh referred to was the loose bolt and
the diameter
thereof). In fact, there would have been no reason at
all why he would have asked for the changes: no-one suggested that
they
served any functional purpose whatsoever.
On the contrary, it was the testimony
of the respondents that they specifically effected the changes in
question simply so that
there would be differences between Ureflex’s
product and that of Gentech. It may be recorded here that at a late
stage
during his cross-examination when he was being pressed on the
issue of the use made by Ureflex of the sample made available,

Belling volunteered the allegation that Myburgh was told that
because of the restriction imposed by the interdict order, Ureflex

had to make ‘its own mount’. Presumably, it was the
further implicit allegation that Myburgh signified his concurrence

therewith. The allegation was a fabrication. It had never featured
earlier, whether in any of the papers or otherwise, and Myburgh
did
not confirm the allegation. It was no more than an attempt by
Belling to avoid the accusation that use had been made of Gentech’s

design.
Was a breach of the interdict order
established?
The position may therefore be stated
as follows: the first three respondents knew that Gentech
manufactured and supplied two types
of foot-mounts, one with a loose
bolt and one with a fixed bolt, that Gentech had a drawing for each
of them, included in annexure
“RA1”, that the sample
brought to them by Myburgh had been manufactured and supplied by
Gentech, that the design
thereof was Gentech’s, that Myburgh
required a modified article, ie one with a loose bolt, with a larger
diameter, that
the foot-mounts were required for onward supply to
Bridgestone, that Gentech had in the past supplied Bridgestone with
a loose
bolt foot-mount. They were also aware of the terms and
import of the interdict order, specifically that it proscribed any
use
of whatsoever nature of Gentech’s designs and drawings, as
being confidential information, and that included therein were
the
physical foot-mounts (of both types) and the drawings thereof. Their
starting point was the sample Myburgh had supplied because
it was
the article which required to be modified. They were obliged to have
regard to the article in order to understand and
carry out Myburgh’s
instructions. They were obliged to have regard to the design as well
as its drawing (and indeed could
not have avoided doing so) as they
had the avowed intention of producing an article which differed in
certain respects. They
were similarly obliged, on the same basis, to
have regard (and could not have avoided doing so) to the design and
drawing of
Gentech’s loose bolt foot-mount. In the result,
they produced an article similar to Gentech’s article, albeit
with
certain differences, which in no way affected the functioning
of the foot-mounts. To the above extent they utilised Gentech’s

confidential information and acted in breach of the interdict order.
The differences were resorted to solely in an attempt to
circumvent
the interdict order.
Was the breach wilful and mala
fide?
As explained in paragraph 13 above,
proof by Gentech of knowledge of the court order and the breach
thereof by the respondents
created a presumption in favour of
Gentech and an evidentiary burden shifted to the respondents to
adduce evidence which established
a reasonable doubt (or reversed or
neutralized the balance of probabilities in favour of Gentech, as
the case may be) as to whether
the non-compliance was wilful and
mala fide
.
The first aspect to be noted is that
it was not part of the respondents’ case that they had been
favoured with legal advice
that their conduct set out above, which I
have found constituted an infraction of the interdict order, was
permissible. The relevant
advice received by them was no more than
that it was permissible for them to treat with an entity not listed
in annexure “X”.
(Zimmer’s late suggestion that
the advice specifically related to A & D was contradictory, not
supported by any other
evidence, specifically that of Friedman, and
was unpersuasive). That advice was, however, qualified with the
admonition that
the treating with the entity in question be lawful
and specifically that it not be tainted by the use of Gentech’s
confidential
information. What would constitute use of confidential
information, and specifically whether the conduct detailed in
paragraphs
194 and 195 above, would constitute such use, was not
canvassed by the respondents with Friedman.
The respondents’ case was in
essence a claim that they had not utilised Gentech’s
confidential information and that
by producing, deliberately, an
article which differed in certain respects from those of Gentech,
they avoided a breach of the
interdict order, a claim I have
rejected. They did not suggest that they
bona fide
believed
that use of Gentech’s confidential information in the manner
detailed above was permissible.
The contention that they did not
breach the order is rejected. The respondents have produced no
evidence to found a finding that
they have discharged the
evidentiary burden resting on them in respect of the issues of
wilfulness and
mala fide
. Insofar as it might be contended
that the respondents’ case embraced the implied claim that
they acted in the
bona fide
belief that the use of Gentech’s
confidential information in the manner set out above was
permissible, my conclusion is
that such a claim would be without
foundation and palpably false. My finding is accordingly that they
did act in contempt of
the interdict order.
The Graymaur application –
the first issue
As recorded in paragraphs 37 and 41
above, the main dispute between the parties in this application
concerned the alleged conduct
of the respondents in relation to the
intended supply of products by Graymaur to Volkswagen. This is
accordingly the first issue
that will be addressed. Thereafter,
other issues which arose in the proceedings will be considered.
Effect of interdict order in
respect of dealings by Ureflex with Volkswagen and Graymaur
Volkswagen was an entity appearing on
the list of Gentech customers forming part of annexure “X”.
Graymaur was an
entity appearing on the list of Gentech suppliers
forming part of annexure “X”. Accordingly, subject to
what is set
out in the following paragraph, it was not in dispute
that the respondents were prohibited in terms of paragraph 2.3 of
the interdict
order, for a period of 12 months, from contacting or
soliciting Volkswagen or Graymaur (ie in the sense referred to in
paragraph
59 above).
However, the respondents’ case
sought to advance an interpretation of paragraph 2.3 that would
further limit the scope of
the restriction on the conduct of the
respondents in respect of dealings with entities named in the lists
in annexure “X”.
The further limit, so it was contended,
was dependent on which list forming part of annexure “X”
contained the name
of the entity involved, ie the customer list or
the supplier list. In short, proscribed dealings with entities
listed as Gentech
customers would comprise dealings with them in
their capacity as customers, ie in connection with
the supply of
goods to them
, while proscribed dealings with Gentech suppliers
would comprise dealings with them in their capacity as suppliers, ie
in connection
with
the supply of goods by them
. Dealings with
a listed supplier, but in the capacity of customer, were not
proscribed, and, similarly, dealings with a listed
customer, but in
the capacity of supplier, were not prohibited.
The distinction sought to be drawn by
the respondents did not arise
vis-à-vis
Volkswagen in
that any relevant dealings with Volkswagen were in fact in its
capacity as a customer. It did, however, arise
vis-à-vis
Graymaur in that, as will appear later, the dealings Ureflex had
with Graymaur related to the supply of products by the former
to the
latter, ie as a customer, whereas Graymaur was listed as a Gentech
supplier on annexure “X”.
Gentech resisted the distinction
sought to be drawn. It contended that it mattered not that Graymaur
was named only in the list
of Gentech’s suppliers forming part
of annexure “X”, and not in the annexure’s list of
Gentech’s
customers. The prohibition against contact and
solicitation provided for in the interdict order (with reference to
entities reflected
on annexure “X”) was a blanket one
covering both customers and suppliers, and was not qualified by a
restriction
relating to the capacity in which an entity was listed
in the annexure.
The counter-argument of the
respondents was in essence that the prohibition provided for in the
interdict order required to be
interpreted in the context of (a) the
annexure to which it referred, and specifically the division therein
between Gentech customers
and Gentech suppliers, and (b) the purpose
of the interdict order having been to safeguard protectable
interests of Gentech.
That context enjoined the interpretation that
the prohibition against contact or solicitation related to, and was
restricted
to, the capacity in which the entity in question was
listed in the annexure. Accordingly (and provided that any dealings
with
Graymaur did not breach the other provisions of the interdict
order), Ureflex was entitled to deal with Graymaur as a customer.
In my judgment, the contention of
Gentech was correct. The relevant wording of the interdict order was
not qualified by the distinction
put forward by the respondents. The
wording stated no more and no less than that the respondents were
prohibited for a period
of 12 months from contacting or soliciting
the entities named in the annexure. The interpretation contended for
by the respondents
was an artificial and contrived one, not
justified by the language of paragraph 2.3 of the interdict order.
(For the sake of
completeness, it may be added here that at a stage
Belling sought to draw a further distinction, namely one between
entities
listed on annexure “X” with which Gentech had
‘a long term relationship’ and entities with whom
Gentech
allegedly did not have such a relationship. And he suggested
that contact with or solicitation of the latter entities would not

constitute a breach of the interdict order. The distinction was
fallacious and Belling well knew that).
It follows that the dealings in
question which Ureflex had with Graymaur in respect of the supply of
polyurethane products to
Volkswagen, full details of which are set
out below, constituted breaches of the terms of the interdict order.
(Similarly, the
unrelated supply of products, styled Linishing
Wheels, by Ureflex to Graymaur also constituted a breach of the
interdict order).
I will later, in the context of the
issue whether the respondents acted wilfully and
mala fide
in
breaching the interdict order by dealing with Graymaur, address the
fact that the respondents at a stage received legal advice
from
Friedman that dealings
simpliciter
with Graymaur as a
customer were not prohibited by the interdict order.
It should finally be recorded that it
was correctly not argued by the respondents that the prohibition
against their contacting
or soliciting Volkswagen hit only direct
dealings between Ureflex and Volkswagen, and that indirect dealings
were not forbidden.
Prohibited indirect dealings would include the
following: (a) the interposing, for the purpose of circumventing the
interdict
order, of Graymaur between Ureflex and Volkswagen, so as
to enable products manufactured by Ureflex to find their way to
Volkswagen
via Graymaur, and (b) Ureflex having dealings with
Volkswagen to facilitate the supply by Graymaur to Volkswagen of
products
manufactured by Ureflex.
Tenders requested by Volkswagen
At intervals (usually of some years)
Volkswagen would require that it be supplied with what were referred
to during the proceedings
as ‘dunnages’. Dunnages may
briefly be described as consisting of (a) steel frames into which
motor vehicle components,
such as eg doors, are placed in order for
same to be transported from one location to another, and (b)
polyurethane supports
(partitions) between the steel frames and the
vehicle components, to protect the components from damage during the
transportation.
Volkswagen would accordingly invite tenders for
inter alia
the provision of the polyurethane products. The
contracts would be worth very considerable sums of money.
During July 2008 Volkswagen invited
tenders for the supply of certain polyurethane supports for
incorporation into dunnages. Initially,
the closing date for the
submission of tenders was 29 July 2008, but various variations to
the specifications of what was to
be supplied were thereafter
introduced from time to time and revised quotations were only
required by later dates. Graymaur submitted
various tenders from
time to time in respect of the polyurethane products to be supplied.
Portions of Graymaur’s final
tender were accepted by
Volkswagen and the former was awarded two contracts (under reference
‘VW 250’). The relevant
two purchase orders from
Volkswagen were dated 29 May 2009 (annexure WW2(a) and (b) to the
answering affidavit of Williams, the
managing member of Graymaur,
filed in the Graymaur application). The two contract prices totalled
in excess of R3 million.
During February 2009 Volkswagen
invited further tenders for the supply of other polyurethane
supports for incorporation into dunnages.
Graymaur submitted a
tender in respect thereof. The tender was accepted and Graymaur was
awarded the contract (under the reference:
‘Metro Side
Panel’). The relevant purchase order from Volkswagen was dated
25 May 2009 (annexure WW1 to the affidavit
of Williams).
Gentech’s case
Graymaur and Ureflex reached
agreement that in the event of the former being awarded any
contracts by Volkswagen the polyurethane
products required for the
execution of the contracts would be manufactured by Ureflex which
would supply same to Graymaur and
invoice Graymaur in respect
thereof. Graymaur would in turn supply Volkswagen with the products
and invoice Volkswagen in respect
thereof.
It was Gentech’s contention
that because Ureflex was prohibited by the interdict order from
dealing with Volkswagen Graymaur
was interposed between Ureflex and
Volkswagen to serve as a front for the supply of polyurethane
products by Ureflex to Volkswagen.
The stratagem was no more than an
attempted circumvention of the interdict order, to which both
Ureflex and Graymaur were witting
parties.
The respondents denied the accusation
and Williams followed suit.
Background to the arrangement
between Ureflex and Graymaur
A prefatory comment is that, as set
out earlier in this judgment, none of the first three respondents,
or Williams, made a favourable
impression on me as witnesses. To be
added to that consideration is the fact that, as will appear below,
the content of the evidence
adduced on behalf of the respondents,
and of Williams’s evidence as well, was in a number of
material respects unsatisfactory
and cognizably lacking in
conviction.
Not only the respondents, but
Graymaur, through Williams, as well, were aware of the prohibition
contained in the interdict order
against the respondents having
commercial dealings with Volkswagen.
Williams was acquainted with first
three respondents, particularly Reddy, and was aware that as of July
2008 the first three respondents
had either already left the employ
of Gentech or were in the process of doing so.
As of July 2008 Graymaur was in fact
not equipped to manufacture polyurethane products, Williams averred
that should it have become
necessary he could, instead of
commissioning Ureflex to undertake the required manufacture of the
polyurethane products, have
equipped Graymaur within two weeks to
attend to same. The question arises why did he not do just that. (I
will later return to
address an allied aspect relating to the
quotation of Ureflex to Graymaur for the supply of the polyurethane
products required
for the implementation of the first contract
awarded by Volkswagen to Graymaur). At the first hearing of oral
evidence it was
Belling’s testimony that Graymaur was not in a
position to execute the work which was the subject of the tender to
Volkswagen
without the assistance of Ureflex. At the resumption,
months later, of the hearing of oral evidence Belling retracted this
statement
and sought to furnish reasons why, as he then testified,
in fact Graymaur was ‘very capable of doing the job without
us’.
The change in stance was not persuasive. Later, Belling
added the averment that Williams would also have been quite capable
of
drawing up a tender for Volkswagen on his own. Williams’s
evidence embraced the same claim. Again, the question arises: why

then did Graymaur not simply tender and undertake the work itself
instead of involving Ureflex?
The evidence on behalf of Graymaur as
to how it came about that Graymaur submitted the first tender to
Volkswagen, referred to
above, for polyurethane supports to be
incorporated into dunnages, was contradictory and confusing. In his
answering affidavit
in the Graymaur application Williams made the
statement that Graymaur
had been asked
, long before the issue
of the interdict order, to furnish a quotation to Volkswagen (and
had also, prior to the issue of the
order, approached Ureflex to
assist as subcontractor).
In the first place, the averment that
Ureflex had been approached by Graymaur before the issue of the
interdict order was, in
the circumstances, a facile one (designed to
distance the dealings between Graymaur and Ureflex from the court
proceedings).
In fact, the interdict proceedings had been launched,
and served on the respondents, on 10 July 2008, and the respondents’

notice of opposition was filed on 14 July 2008, both prior to 15
July 2008, the date on which, according to the respondents and

Williams, Graymaur allegedly approached Ureflex, with drawings
furnished by Volkswagen, to furnish a quotation to Graymaur in

respect of the polyurethane products in question. It was therefore
already known that Gentech was seeking relief in the form
of a
prohibition against Ureflex’s dealing with Volkswagen and
Graymaur.
The assertion by Williams in his
affidavit that Graymaur had been asked by Volkswagen to quote in
respect of the dunnages polyurethane
requirements was initially
persisted in by him during the course of his oral testimony. It was
to the effect that he had received
a telephone call from Volkswagen
conveying the request that he submit two tenders, one for an
unrelated contract and another
in respect of the polyurethane
components of the dunnages, and that he should attend a site meeting
at Volkswagen in connection
therewith. It was alleged that the
invitation to Graymaur to tender on the polyurethane contract found
its origin in the fact
that years before Graymaur had submitted a
tender to Volkswagen for certain polyurethane products, and was
therefore on Volkswagen’s
books as a polyurethane vendor.
However, later in his oral testimony
it transpired that he had been contacted only in connection with the
unrelated contract.
It was only at the site meeting that he came to
learn that Volkswagen would also be seeking tenders in respect of
polyurethane
dunnages components. He thereupon approached the
Volkswagen representative and requested that he also be allowed to
tender in
respect thereof and be furnished with the drawings
necessary for the tender.
During the course of his testimony
Williams sought to state that Ureflex had not been the only entity
that he had had in mind
as the subcontractor in respect of
Graymaur’s tender to Volkswagen for the polyurethane products.
He purported to testify
that he had been in contact with another
concern in Johannesburg on this score. When his evidence was placed
under the scrutiny
of cross-examination, however, it transpired that
he had been well aware from the very commencement that there could
not have
been any serious talk of the alleged Johannesburg concern
being engaged as the subcontractor. It would, for instance, have
entailed
that the steel frames from Volkswagen would have had to be
transported to Johannesburg to enable the subcontracting work to be

undertaken, ie the bonding of the polyurethane supports to the steel
frames. The costs attendant thereon, so Williams admitted,
would
have rendered the whole project unfeasible. Williams did thereafter
suggest that he had had discussions with the Johannesburg
entity in
connection with the alternative of the latter setting up the
necessary plant in Graymaur’s premises in Port Elizabeth.
In
the light of Williams’s other evidence concerning the tooling
that would be required for the production in question,
referred to
below, the above evidence of Williams was a fabrication.
The quotation received by Graymaur
from Ureflex was in respect of the manufacture and supply of the
polyurethane products in question,
but did not include the tooling
required. Williams testified that it was his intention that Graymaur
would attend to the making
of the tooling, would make same available
to Ureflex, would invoice Volkswagen in respect thereof and would
store same at its
own premises after the contract had been executed
until such time as Volkswagen (who would have become the owner
thereof) wished
to recover possession of same.
Why Volkswagen would at all have
wanted to become the owner of the tooling was not explained. Why
Graymaur would have manufactured
the tooling, but not thereafter
attend to the manufacture of the polyurethane components itself
(notwithstanding Williams’s
claim that he could have set up
Graymaur as a polyurethane producer within two weeks) was not
explained. In fact, when Williams
subsequently purported to
introduce a further entity, Pat and Mike Sales Services CC of East
London (Patmike), into the arrangement
between Ureflex and Graymaur
(in circumstances set out more fully below) and Ureflex was required
to submit a quotation to Patmike
instead of Graymaur, the quotation
(annexure FA51 to the founding affidavit in the Graymaur
application, a document retrieved
during the implementation of the
first
Anton Piller
) included the price of tooling. So also,
in the quotation by Ureflex to Graymaur in respect of the
manufacture and supply of
the polyurethane components required for
the second contract awarded by Volkswagen to Graymaur (annexure FA55
to the affidavit,
also a document retrieved pursuant to the
Anton
Piller
proceedings), the price of tooling was included. The
inference is that Ureflex was in due course to supplement its
initial quotation
to Graymaur to cover the cost of tooling (and in
his oral testimony Belling confirmed that Graymaur would have
contributed nothing
to the manufacture of the products required.
This latter evidence of Belling gives the lie to Williams’s
evidence, given
in explanation of his version of an inspection of
Ureflex’s premises carried out by Volkswagen, referred to
below, which
embraced the allegation that he, Williams, was to
attend to the manufacturing process in Ureflex’s plant). The
further
inference is that Williams resorted to the evidence referred
to above to advance his denial that Graymaur had been interposed
between Ureflex and Volkswagen as a mere front. In any event, if
indeed Graymaur was to make tooling available to Ureflex, or
as
Reddy put it, to make the moulds available to Ureflex, that would
constitute a supply by Graymaur to Ureflex. The contact
with, and
solicitation of, Graymaur in respect of such supply was a clear
breach of the provisions of the interdict order. No
advice was
sought from, or given by, Friedman on this score.
In explanation of the quotation to
Patmike by Ureflex (during January 2009) referred to above Williams
stated that he brought
the concern into existence with a view to
securing BEE business, for which purpose he had a person from the
so-called coloured
group as a partner. He wished to channel the
Ureflex business through Patmike (which would in turn invoice
Graymaur in respect
thereof and, again, Graymaur would invoice
Volkswagen) so that the latter would have on its record a vastly
increased turnover,
which, in turn, so Williams said, would enhance
its prospects of securing BEE contracts in that the impression of
successful
conduct of business would be created. However, relations
between Williams and his partner soured, and the plans came to
nought.
So Williams reverted to the original arrangement.
Both in cross-examination of Williams
and in argument Mr
Ford
subjected the explanation of Williams
to trenchant criticism, on the basis that it was no more than an
apparent attempt to conceal
the paper trail evidencing the
connection between Graymaur and Ureflex. The criticism was not
without merit. (It is not without
significance that in his oral
testimony Belling conceded that he could not say that at the time in
question neither he nor Williams
were worried about the fact that
Graymaur was an entity listed on annexure “X”). In the
result, however, I am not
sufficiently persuaded that I should act
on the criticism as constituting a contribution to a finding against
the respondents
that there was collusion between Ureflex and
Graymaur to circumvent the terms of the interdict order.
The final factor to be considered as
part of the background to the arrangement between Ureflex and
Graymaur relates to an inspection
visit paid by Volkswagen
representatives to the premises of Ureflex. The inspection was held
during February 2009.
The evidence revealed that
Volkswagen, aware of the fact that Graymaur was not a producer of
polyurethane products and would engage
the services of a
subcontractor, namely Ureflex, to manufacture and supply the
polyurethane components which were the subject
of the contract for
which Graymaur tendered, required that it be satisfied that Ureflex
did in fact have the facilities to enable
it to undertake the
manufacture of the product. At Volkswagen’s insistence
therefore arrangements were made by Williams
with Ureflex for
Volkswagen representatives to attend at the premises of Ureflex and
conduct an inspection of its plant. Williams
was to be present.
The evidence of Belling and Williams
concerning the inspection visit was dramatically contradictory.
Belling stated that he met
the inspection party at the entrance to
Ureflex’s premises and after being introduced to the
Volkswagen representatives,
admitted them to the premises.
Thereafter, Belling accompanied the inspection party while it went
through the plant (the visit
not being a lengthy one), but he did
not direct the party where to go nor, indeed, did he exchange any
further words at all with
any members of the party, except,
presumably, to bid them farewell on their departure. As Belling put
it, he ‘was present
only in body’. Indeed, it was
Williams (who, according to Belling, had previously visited
Ureflex’s plant) who allegedly
directed the tour and furnished
the explanations as to which parts of the plant would be used to do
the manufacture and the manner
in which that use would be made.
Williams agreed that Belling met the
party at the entrance of the premises, but there, so Williams
alleged, Belling’s participation
ended, and he did
not
accompany the party during the inspection tour, of which fact
he, Williams, was certain. He claimed that it was he who then
directed
the tour and furnished whatever explanations were
necessary. In this regard it may be noted that in his affidavit in
the
Anton Piller
application Williams, after recording that
he was aware of the prohibition against the respondents soliciting
or doing business
with Volkswagen, continued as follows (the
reference to Meyer being to the Volkswagen representative):
‘
As
a consequence, I supervised the inspection with Meyer (which was at
his insistence) which amounted to nothing more than a brief
stroll
through the Ureflex plant under my direction.’
Asked why he would have been
responsible for the conduct of the tour Williams stated that he
‘would pretty much have managed
the work’ in Ureflex’s
plant, Graymaur would have supplied the tooling and would have
directed Ureflex where to cast
the polyurethane into the steel
frames. Again, the question falls to be asked: Why was Ureflex to be
involved at all, when Williams
testified that the mixing of the
polyurethane components was a simple task, and it speaks for itself
that the casting could readily
have been undertaken by Williams. The
latter in fact said he had the skills required for that task.
I have no hesitation in finding that
in material respects both Williams and Belling lied. Contrary to
Belling’s allegation
(which was part of his mendacity) that
Williams had been to the plant previously, Williams specifically
stated that the inspection
tour was the first occasion on which he
had been to Ureflex’s plant. It is in these circumstances not
credible that Williams
(who also, in fact, had no practical
experience specifically relating to the manufacture of polyurethane)
would conduct an inspection
tour without a knowledgeable person from
Ureflex in attendance. I find therefore that Belling was in
attendance and that Williams’s
mendacity on this score was
part of his endeavour to avoid the accusation that he was merely a
front for Ureflex.
However, I also have no hesitation in
finding, for what I would describe as manifestly obvious reasons,
that the version of Belling
as to the role he played was not only
farfetched and farcical, but also a calculatedly mendacious one
designed to mislead me.
The scenario painted was indeed surreal.
There can be no doubt, as a matter of common sense, that Belling
took an active part
in the conduct of the inspection tour. (If,
indeed, it was Williams who conducted the tour through Ureflex’s
plant, it
need hardly then be stated that, as a matter of common
sense, he did so as a front, albeit wholly transparent, for Ureflex,
in
an attempt to circumvent the interdict order). In the result,
Volkswagen were satisfied as to Ureflex’s capabilities.
Finding based on the above
background
In my judgment, the only reasonable
inference to be drawn from the background to the arrangement between
Graymaur and Ureflex
recorded above, is that the arrangement
constituted a circumvention of the terms of the interdict order, and
was accordingly
a breach thereof (paragraph 209 above).
Did the inspection in any event
constitute a breach of the interdict order?
Whatever the extent to which the fact
of the inspection supports the contention of Gentech that Graymaur
was no more than a front
to enable Ureflex indirectly to do business
with Volkswagen, the very inspection by itself constituted a
manifest breach of the
interdict order’s prohibition against
Ureflex contacting or soliciting Volkswagen, a client listed in
annexure “X”.
In short, on either of the factual
versions put forward on behalf of the respondents, and even more so
on the finding I have
made above as to Ureflex’s role in the
inspection, the position is that Ureflex made an undoubtedly
important contribution
to facilitating, by direct contact with, and
solicitation of, Volkswagen, the sale of products manufactured by
Ureflex to Volkswagen
through Graymaur as intermediary (paragraph
209 above).
The validity of the claim by the
respondents that in their being party to the inspection visit,
reliance was placed on legal advice,
is considered below.
Were the infractions referred to
above wilful and mala fide?
The first infraction to be considered
is the breach of the interdict order constituted by Ureflex’s
mere dealing with Graymaur
(paragraphs 202 to 208 above).
In my judgment, the distinction
(discussed in the abovementioned paragraphs) sought to be drawn by
the respondents, between Gentech
clients and Gentech suppliers, was
so manifestly wrong that the mere
ipse dixit
of the
respondents that they acted on the purported distinction would carry
no weight and would not import any doubt as to their
wilfulness or
mala fides
. As will be shown below, they themselves
entertained real doubts on the score of the alleged distinction, and
their proceeding
to deal with Graymaur notwithstanding such doubts
would entail an intention, wilful and
mala fide
, to breach
the interdict order in the form of
dolus eventualis
(paragraph 14 above).
However, as foreshadowed earlier, it
was the respondents’ case that they at a stage received legal
advice that they could
legitimately do business with Graymaur (an
entity listed in annexure “X” as a Gentech
supplier
)
provided it was with Graymaur in the capacity of
customer
.
Accordingly, they did not act wilfully or
mala fide
in
dealing with Graymaur. The defence fails.
In the first place, the evidence
reveals that the respondents dealt with Graymaur for a considerable
period before they sought
legal advice as to whether it was
legitimate for them to do so. It was already in June 2008 that
Ureflex submitted a quotation
to Graymaur in respect of the supply
to it of polyurethane products. In the months thereafter their
dealings with each other
were in connection with the supply of
polyurethane products for the implementation of the contracts with
Volkswagen that were
envisaged, and as recorded earlier, these
dealings commenced on 15 July 2008. (It may be appropriate here to
record that during
his oral testimony Belling admitted that he had
falsely stated in his affidavit in the
Anton Piller
proceedings that Graymaur approached the respondents ‘much
later than July 2008’).
The first advice given by Friedman to
the respondents was by way of an email dated 13 August 2008
(annexure GJF1 to exhibit E,
a summary of the evidence that Friedman
was to give during the hearing of oral evidence). It was in answer
to an email from Belling
of the same date in which, included as part
of a series of questions, was a query worded as follows:
‘
Graymaur
has been a minor supplier to Gentech in the past however now they
want to be a customer of ours – they have approached
us for
supply can we supply them.’
(It may be noted that Belling did not
mention that negotiations between Ureflex and Graymaur in respect of
the Volkswagen dunnages
tender, were already afoot. Friedman
confirmed that it was only in December 2008 that he was made privy to
this information).
In his response Friedman recorded
that he would answer a number of questions raised as to the meaning
of the interdict order,
specifically the provision therein for a 12
month prohibition against
inter alia
‘
contacting
or soliciting [Gentech’s] clients, agents and/or suppliers
listed in annexure “X”
’. The first piece of
advice given by Friedman was that the interdict order must be
interpreted in its ordinary grammatical
meaning. Then, with
reference to what was stated to be an indication by the respondents
that entities in opposition to Gentech
wanted to place orders on
them, and might wish to ‘onward supply’ to Gentech
customers, Friedman stated, in general
terms, that as long as the
respondents were not involved in the solicitation, and manufactured
for a customer on request, he
did not believe that the respondents
would breach the interdict by supplying a customer who was not
listed on annexure “X”.
In the light of an earlier comment by
Friedman to the effect that Gentech had to bear the consequences of
annexure “X”
being an incomplete list of Gentech’s
customers, the advice given related only to entities that were
customers of Gentech,
but were not listed on annexure “X”,
and did not bear on a purported distinction between customers and
suppliers
in annexure “X”. The advice therefore did not
bear on the issue of the propriety of the respondents dealing with

an entity listed in the annexure as a supplier but in the capacity
of customer. That the respondents did not view the advice in
a
different light, is borne out by the fact that they later sought
further advice specifically in relation to their dealing with

Graymaur.
It was only on 3 December 2008 that
Friedman furnished specific advice in respect of the query by the
respondents whether they
could supply Graymaur. He then drew the
distinction between customers and suppliers referred to earlier and
opined that he could
not for one moment believe that supply to
Graymaur was hit by the interdict order. He added, however, that he
held that view
‘rightly or wrongly’ and that the
respondents would realise that he could not give them a guarantee.
The response from Belling to Friedman
on the same day read as follows ‘
[T]he phrase
“cannot give guarantee” virtually nulls everything else.
We need to know, who can advise you?’
This clearly
indicated that the respondents fully realised that in the light of
the terms in which the advice was couched, they
could not act on it.
In fact, under cross-examination Belling conceded that Friedman had
not given him ‘very firm advice’
and that he was ‘not
happy with the advice’.
Whether there was a response by
Friedman to Belling’s query recorded in the preceding
paragraph was not canvassed in the
evidence. It appears, however,
that Belling addressed a further letter to Friedman on 11 February
2009 seeking clarity. The opening
paragraph of Friedman’s
email to Belling dated 16 February 2009 (annexure GJF7 to exhibit E)
read as follows:
‘
I
refer to your letter of 11 February 2009 and the request for some
comfort as to the position with regard to manufacture.’
In the letter Friedman reiterated that
it was his view that the distinction in question entitled Ureflex to
supply Graymaur. It
is to be stressed, however, that he did not
withdraw his earlier comments that his view might be right or wrong
or that he could
give no guarantee in the matter. The advice
therefore remained of a nature that could not be acted upon.
Belling’s later
equivocal evidence, that Friedman may, or must,
have given him further advice on a later occasion, carried no weight,
nor was it
supported by evidence from Friedman.
Therefore, at best for the
respondents, they realised that the possibility was there that
dealing with Graymaur would constitute
a breach of the interdict
order, but they nevertheless proceeded. Intention in the form of
dolus eventualis
is accordingly to be imputed to them; hence,
wilfulness and
mala fides
. They therefore committed contempt
of court.
The second infraction was the
circumvention of the interdict order by the interposing of Graymaur
between Ureflex and Volkswagen.
It needs only to be said that
insofar as the respondents might have sought to hide behind the
advice of Friedman referred to
above, the remarks made in the
preceding paragraphs apply
mutatis mutandis
. However, in my
judgment any suggestion that the respondents did not fully realise
that what they were about was a circumvention
of the interdict
order, falls to be summarily rejected. The respondents acted
wilfully and
mala fide
and were guilty of contempt of court.
The last infraction, the
participation in the inspection visit, may be shortly dealt with.
The claim was made by both Belling
and Reddy that advice was
received from Friedman that as long as Ureflex did not participate
in the inspection, and it was carried
out ‘at arm’s
length’, there would be no breach of the interdict order. The
claim is an unbelievable one. Apart
from the important circumstance
that the alleged advice did not in fact feature in the advice that
Friedman testified he gave,
I have already found, as a matter of
common sense, that Ureflex did participate in the inspection and it
was not conducted at
arm’s length. In any event, the mere fact
that Ureflex made its premises available for inspection manifestly
constituted
a breach of the interdict order, and any claim by the
respondents that they thought otherwise must be rejected as palpably
false.
Again, the respondents acted wilfully and
mala fide
and were guilty of contempt of court.
The Graymaur application –
the second issue
This issue related to Ureflex’s
receipt of supplies from Belting Supplies (as stated earlier, an
entity listed on annexure
“X” as a Gentech supplier)
during December 2008. In answer to a charge by Nel in the
Anton
Piller
proceedings that the respondents had not made proper
discovery for the hearing of oral evidence Belling stated as follows
in
his answering affidavit:
‘
We
obtained a quotation from Hudson Rubber which is on X list. This
quotation was obtained only for comparative purposes. We cannot
buy
from Hudson Rubber and did not buy from them. Once the comparative
order had been received, we ordered goods from Tensile Rubber
who are
not on the X list. However, we had to collect the goods from Tensile
Rubber’s local agent, Belting Suppliers, when
we had to pay
locally. We did not know this when we placed the order, namely that
delivery would take place through Belting Supplies
who are on the X
list.’
In his founding affidavit in the
Graymaur application Nel stamped this explanation as false. He
pointed out that since February
2007 Tensile Rubber had adopted a
rigid policy that all its supply of product in Port Elizabeth would
take place via its local
agent, Belting Suppliers. Accordingly,
while orders were placed directly on Tensile Rubber, the orders were
processed through
Belting Suppliers which itself invoiced the
customer. In support of these averments Nel annexed an order form
from Gentech to
Tensile Rubber dated 6 February 2007 (annexure FA45)
on which the latter had endorsed in manuscript the request that
orders be
placed with Belting Suppliers which had been appointed as
its local agent. Belling signed the endorsed annexure. Belting
Suppliers
invoiced Gentech in respect of the order (annexure FA46).
In response Belling alleged that
Gentech ‘twisted’ the disclosure he had made in the
Anton Piller
proceedings. He mooted the possibility that it
had not been he, but his wife or Reddy, who might have placed the
order with Hudson
Rubber and he claimed that it was only when
payment by Ureflex for the order became due that he became aware
that the order would
have to be collected from Belting Suppliers and
that Ureflex would pay Belting Supplies. His oral testimony was
unsatisfactory.
He did not dispute that his signature was on the
relevant annexure, but he suggested for the first time that Gentech
had refused
to accept that Belling supplies be Tensile Rubber’s
local agents as this would lead to inflated prices, and that the
‘rigid
policy’ was not a hard and fast rule. He further
added that it was indeed he who spoke to Tensile Rubber to place the
order
and he claimed that in fact he told Tensile Rubber that he
wanted a good price and would not purchase through Belting Supplies.

He signified that Tensile Rubber accepted that position. However,
when Tensile Rubber thereafter contacted Ureflex to advise
that the
goods ordered were ready they did not speak to him, but to someone
else, and it was then said that delivery had to be
taken from
Belting Supplies and that payment had also to be effected to them,
and that is what then happened. Shortly therafter,
when his
statement in his affidavit was put to him, ie that he could not even
recall if it was he who made the call to Tensile
Rubber, he said
that he could not remember if it was he who had initially spoken to
Tensile Rubber, although it was he who placed
the order. The
evidence merely demonstrated that Belling was only too ready
facilely to adapt his evidence when he was caught
out on the falsity
thereof. I find that Belling well knew that the goods would come via
Belting Supplies and that Ureflex would
therefore have to have
contact with Belting Supplies. The respondents therefore acted
wittingly.
Belling went on to add averments to
the effect that there was in any event ‘really no prohibition’
against the respondents
dealing with Belting Suppliers as they were
‘a public domain company and supply the general public’
(and, it would
seem, should therefore not have been listed in
annexure “X”). Suffice it to say that the averments
carried their
own refutation.
Despite what is said in the preceding
paragraph, the respondents’ answer to the charge of contempt
of court in respect of
their dealing with
Belting Supplies
was not that they
bona fide
believed that same was
permissible, but rather that they were, unwittingly, forced into the
position where they were obliged
to deal with Belting Suppliers. In
the light of my rejection of this factual defence, the respondents
were guilty of contempt
of court.
The Graymaur application –
the third issue
The third issue revolves around an
alleged visit paid by the first three respondents and a fourth
person (who was never identified,
but who, so it was suggested on
behalf of Gentech, was Chellew) paid to Stuurman at his place of
work during December 2008 (about
which Stuurman testified during the
hearing of oral evidence). That place of work was the premises of
the entity then known as
Transwerk (and is now known as Transnet
Rail Engineering). Transwerk was specifically named in paragraph 2.3
of the interdict
order as an entity which the respondents were
prohibited from contacting or soliciting.
Gentech was during 2008, and remains,
a registered vendor with Transwerk and supplied, and continues to
supply, Transwerk with
inter alia
polyurethane products.
Stuurman was, and remains, responsible to procure and replenish, on
behalf of Transwerk, stock from the
various registered vendors. He
would therefore be in contact with vendors from time to time and
build up relationships with the
representatives of the vendors. He
has been employed at Transwerk for some eight years. He is now the
manager of Transwerk’s
rolling stock department, a position he
has held for three years. During 2008 the representative of Gentech
with whom Stuurman
used to have contact was Zimmer.
Stuurman’s further evidence
proceeded as follows. On a day during December 2008 Zimmer arrived
unannounced at his office
in the company of three other men. He was
introduced by Zimmer to these men. He identified Belling and Reddy
(who were present
in court) as two of the men, but he could not say
who the fourth man was.
The purpose of the visit was for
Zimmer to advise him that he and his colleagues had left the employ
of Gentech, and that they
had started a new company called Ureflex.
Reddy gave him the business card of Ureflex. He still had the card
in his office.
Subsequently, during February 2009,
Nel and Mr McClelland (the majority member of Gentech) paid him a
visit. The evidence of Stuurman
and Nel was further that Stuurman
was advised that he would no longer be dealing with Zimmer as the
latter had left Gentech.
Stuurman in turn advised Nel and McClelland
that ‘they’ (as to whom, in addition to Zimmer, the
reference was, see
below) had visited him during December and had
told him the same thing, that they had left the employ of Gentech.
He recognized
and confirmed, when the names Belling and Reddy were
put to him, that these were the names of two of the men who had
accompanied
Zimmer. Similarly, he confirmed that the appearance of
the two men tallied with the description given to him.
He firmly stated that he did not have
any doubt that Belling, Reddy and Zimmer were three of the four men
who came to see him
in December 2008.
He was subsequently telephonically
contacted by Mr Gough, Gentech’s attorney, and had a
discussion with him. Gough thereafter
addressed a letter to him,
dated 5 March 2009, to record the contents of the discussion.
Stuurman confirmed that the letter was
a correct record of their
discussion. (See, however, the qualifications recorded below). The
letter (annexure RA2 to the replying
affidavit of Nel filed in the
Anton Piller
proceedings) read as follows:
‘
We
refer to the conversation between the writer and Mr Stuurman on 5
March 2009. Thank you for taking the time to talk to us regarding
the
relationship between Ureflex and Transwerk.
We would like to confirm
certain aspects of our conversation, in particular, that:
Transwerk’s
relationship with Ureflex was through Sheldon Zimmer;
You were visited by
Sheldon Zimmer, together with other individuals from Ureflex
during December 2008;
The purpose of the
meeting was to say “hi” and you were advised that
Ureflex was involved in the polyurethane
industry;
They left a Ureflex
business card;
We also confirm that you
told the writer that you do not wish to become involved in the issues
between Gentech and its former employees
and accordingly you are not
prepared to provide an affidavit with regard to the above.
Consequently, I have
addressed this letter to you as a precautionary measure so as to have
a record of our conversation.
Incidentally, members of
Gentech, namely Barry McClelland and Fanie Nel informed us that at a
meeting with you on 5 February 2009
you told them that Keith Belling,
Kevin Reddy and Ray Chellew were present at the meeting referred to
above. In a similar vein
you also told one of Gentech’s
representatives, Johnny Anderson (while showing him the Ureflex
business card) that the December
meeting was attended by six Ureflex
representatives. Mr Hickson, also an employee of Transwerk, advised
Brendon Holmes (during
January 2009 when following up on the award of
a contract for the urethane coating of metal securing plates and
U-channels) that
the award had not yet been made as there was still a
quote outstanding. Mr Hickson went on to say that Elastotech and
RayTech were
also quoting for the business.’
In the
Anton Piller
proceedings an affidavit by Gough was filed in which he confirmed
that he had had a telephonic discussion with Stuurman on 5
March
2009 and that the letter quoted above was a correct record of the
discussion.
It was, however, implicit in
Stuurman’s evidence that he could not, in the witness box,
confirm that the name ‘Chellew’
had been mentioned by
him. It was also not his evidence that the number of Ureflex members
that visited him in December was
six
. The summary of his
evidence, which had been made available prior to his entry into the
witness box (exhibit M) also recorded
that he was visited by Zimmer
and three other men, whose names he could not remember. One of them,
however, was clearly an Indian
(which Reddy is).
Each of Belling, Reddy and Zimmer
(and, for that matter, Chellew as well) denied that there had been
any meeting between them
and Stuurman during December 2008.
It was put to Stuurman during
cross-examinatio by Zimmer that during the last week of July/the
first week of August 2008 there
had been a meeting between him and
Belling, Reddy and Zimmer. During that meeting Stuurman mentioned
that approximately two weeks
earlier Nel and McClelland had visited
him and advised him that the first three respondents were no longer
employed at Gentech
(or had at least been suspended). Stuurman,
however, firmly rejected the proposition and affirmed his earlier
evidence.
I drew Stuurman’s attention to
the fact that Zimmer’s proposition had included the averment
that at the alleged July/August
meeting he, Stuurman, had also said
that Nel told him that Reddy had copied some Gentech seals (or a
drawing thereof). Stuurman
responded by saying that he was reminded
thereby that sometime after the visit of Nel and McClelland to him
during February 2009
‘they’ (including Zimmer) had come
again in order, so his impression was, to see someone in Transwerk’s
procurement
department, and Zimmer had also come to see him and it
was then that he told him that the allegation against Reddy had been
made
by Nel during their February meeting.
It was put by Zimmer that it was he
and Belling who had come to see Stuurman, to which Stuurman agreed,
but he could not confirm
that it was during March. In the nature of
things Stuurman could not comment on the proposition that it was on
legal advice that
Zimmer and Belling had come to see him, but he
agreed it was in connection with the allegation that there had been
a meeting
in December. It was put to him that he had been very livid
and had intimated that he had not wanted to get involved. He
confirmed
that he had made it clear that he had not wanted to get
involved and that he had referred to the fact the Ureflex party had
visited
him in December, Nel and McClelland in February and now
there had been the further visit by Belling and Zimmer. Similar
questions
put by Belling elicited the same responses, but then
Stuurman particularly said that he had not become angry, and had
merely
indicated his unwillingness to get involved.
In his affidavit (in answer to
allegations by Nel in the
Anton Piller
proceedings concerning
the visit to Stuurman by the Ureflex party) Belling stated that when
he (with Zimmer) had gone to see
Stuurman during March 2009 to
establish why Stuurman had made the averment of the meeting, the
latter stated that he had made
no such allegation. In his oral
evidence statements were variously made by Belling
inter alia
that Stuurman acknowledged that ‘he had not met with all of
them’, that he could not remember who it was that he
met with,
that ‘he was not sure about anything’ and that he
finally conceded in effect, that there had been no such
meeting and
the Ureflex party had not been to see him. Not only was the
evidence, in its entirety, extremely confusing, but I
also have no
hesitation in stamping Belling’s allegations – which,
incidentally were not put to Stuurman when he
subsequently entered
the witness box – as blatant fabrications. The same applies to
Zimmer’s allegation that Stuurman
stated to him and Belling
that they (ie the Ureflex party) had not been to see him in
December. Zimmer had not put same to Stuurman,
who testified before
him.
Stuurman further confirmed that a
system was in place at the entrance gate which required visitors to
fill in and sign documentation,
and the employee whom they came to
see to record (with signature) the time they left. He pointed out,
however, that he had not
had any appointment with the Ureflex party
in December, they had come to see someone else and had simply popped
into his office,
and therefore there might not be any record of his
signature in respect of their departure. He further indicated that
there would
not always be a record of visitors signing in; frequent
visitors who were known to the security personnel, were simply
allowed
entry. Although afforded an opportunity later to pursue the
aspect of the entrance gate records, the respondents did not do so.
I have taken cognizance of possible
inconsistencies relating to Stuurman’s evidence, as opposed to
misunderstanding (paragraph
265 above), but I do not think same is
of any moment. His version was otherwise consistent throughout, he
had no axe to grind
in the matter and his calibre as a witness was
far superior to that of the first three respondents who, as I have
recorded earlier,
did not present as credible witnesses. Stuurman
appeared to be a responsible and reliable person. The suggestion
that his evidence
was made up, or even that it might have been
mistaken, is not a palatable one. I have no hesitation in accepting
his evidence
and rejecting that of the respondents as false.
To complete the discussion of the
issue, reference should be made to the fact that Zimmer alleged (and
was supported by his colleagues
in the allegation) that because of
what he referred to as ‘all the litigation’, and the
fact that the respondents
were under surveillance by agents of
Gentech, he, who was of a nervous disposition, could no longer take
the strain, and accordingly
he decided to withdraw from Ureflex
(which he did on 8 October 2008) until after the 12 month period
fixed in the interdict order.
(The litigation that had occurred
prior to his alleged withdrawal was the interdict proceedings and
the launch of an application
by the respondents to secure an order
that Gentech retract a certain circular letter it had sent to its
customers and suppliers,
which in the result was subsequently
dismissed). It was only during August 2009 that he rejoined Ureflex.
These allegations were
invoked as support for the respondents’
denial that they had met with Stuurman at his office in December
2008 as he had
testified.
I have reservations about the claim
of Zimmer’s withdrawal from Ureflex on the date mentioned.
First, it may be of significance
that Gentech had secured
documentary evidence (annexure FA8 to Nel’s founding affidavit
in the A & D application) that
it was on 7 October 2008 that
Zimmer had prepared the quotation submitted to A & D referred to
in paragraph 150 above, and
the allegation of the respondents that
it was on the very next day that Zimmer withdrew from Ureflex, is a
convenient one.
Second, in the Graymaur application
Nel made reference (albeit on a hearsay basis) to a letter of
introduction of Ureflex to an
entity styled Lotus Engineering which
Belling had personally handed to the representative of the firm on
18 May 2009 (annexure
FA10 to Nel’s founding affidavit). The
first two paragraphs of the letter read as follows:
‘
We
take this opportunity to thank you for your time and the opportunity
to introduce ourselves and Ureflex CC to you and your company.
Ureflex is a new
manufacturing business operating under ISQ Standards, fully BEE
compliant, its members being Kevin Reddy, Sheldon
Zimmer and Keith
Belling.’
Thereafter a tabulation of the
services which Ureflex could offer was set out.
Belling’s answering affidavit
(filed on 10 June 2009) embraced an admission that he had in fact
handed the letter of introduction
to Lotus Engineering. He sought to
aver, however, that Reddy was the only official member of Ureflex
(but that as between Reddy
and him, they were equal members), that
Zimmer was at that stage not a member, that the letter of
introduction was incorrect
insofar as it referred to Zimmer, and had
been printed ‘
from a draft prepared a long time
ago when Zimmer was involved’
.
It need hardly be stated that this
explanation lacked credence.
On the other hand, there is
documentary evidence of written communications between Belling and
Zimmer and between Friedman and
Zimmer during October 2008 relating
to Zimmer’s having given notice of his intention to withdraw
from Ureflex. It is also
so that Friedman testified that, as he put
it, Zimmer was in a shell-shocked state of mind; hence, his wish to
withdrawn from
Ureflex and ‘sit out the restraint’.
However, even if Zimmer had withdrawn
as an employee of Ureflex as claimed, that would not have been a bar
to his being a member
of a Ureflex party that sought to make contact
with Stuurman in December 2008. In fact, there would have been every
reason why
Zimmer would have been included in the party: he had
previously been Gentech’s contact with Stuurman and a
relationship
between them existed, his presence would make the visit
more effective, and Zimmer was in due course to rejoin Ureflex.
Indirect support for Gentech’s
case relating to the December meeting deposed to by Stuurman is to
be found in the evidence,
dealt with under the succeeding heading,
of further dealings by Zimmer on behalf of Ureflex with another
entity at about the
same time.
I find therefore that the visit did
take place. It was correctly not disputed that such a visit
contravened paragraph 2.3 of the
interdict order. No basis was put
forward to question whether the contravention was wilful and
mala
fide
. The respondents accordingly acted in contempt of the
interdict order.
The Graymaur application –
the fourth issue
This issue concerned alleged dealings
involving Ureflex and a Johannesburg entity styled Powertech Calidus
(Powertech). Powertech
had for years been a regular supplier of
requirements needed by Gentech, and was listed on annexure “X”
as a supplier.
The witness Rudolph was called to
adduce evidence on behalf of Gentech at the hearing of oral
evidence, ie during September 2010.
He had previously been in the
employ of Powertech, in the position of production manager. While he
had not personally met Zimmer,
he testified that in the course of
the business relationship between Gentech and Powertech, he had had
occasion to speak to Zimmer
on ‘hundreds of occasions’
in connection with the supply of products by Powertech to Gentech,
ie in relation to the
price thereof, whether Powertech could
undertake the supply and what the approximate date of delivery would
be. In fact, Gentech
was favoured with special prices. He would then
attend to the execution of the orders placed.
Mr
Ford
placed exhibits O and
P before the witness. The former was a copy of a tax invoice from a
Johannesburg entity styled UTI Sun
Couriers, dated 11 December 2008.
It reflected that a consignment delivery had been made by the
couriers from Powertech to Raytech
in Port Elizabeth on behalf of a
firm styled Brake Supplies. (I interpose to record that Brake
Supplies was a part time delivery
firm run by Belling’s wife
in Port Elizabeth, and on Belling’s evidence, shared Gentech’s
premises). Exhibit
P was a copy of a bank statement of Raytech which
reflected that on 8 December 2008 Raytech effected payment into the
account
of Powertech of the sum of R35 251,29.
Asked whether Powertech was involved
in such a transaction at that time Rudolph replied in the
affirmative and stated that it
was pursuant to telephone calls made
to him by Zimmer. Zimmer had telephoned him to confirm the price of
a product (ie insulation
boards) and, as usual, he assumed that
Zimmer was acting on behalf of Gentech, which had a price list from
Powertech. After confirming
that Powertech had the stock to fulfil
an order and the date of delivery Zimmer placed the order.
Zimmer thereafter telephoned him
again and requested details of Powertech’s bank account.
Rudolph referred him to Powertech’s
accounts department to
secure the details. The accounts department advised Rudolph some two
days later that payment for the order
had been made into Powertech’s
account, and the order could therefore be executed. Rudolph had to
see that the goods ordered
would be taken to the store and Zimmer
was to arrange the courier services to make delivery of the
consignment to the consignee.
The transfer to the store would have
taken place two or three days after the payment. The above events
occurred roundabout the
beginning of December 2008.
At no stage had Zimmer enlightened
Rudolph that he was no longer attached to Gentech. He, Rudolph, only
learnt of that fact when
Nel and Anderson, another representative of
Gentech, had a meeting with Rudolph and Powertech’s sales
manager in Johannesburg
during January/February 2009.
For the sake of completeness it may
be mentioned that Rudolph testified that the firm to which he is at
present attached has dealings
with Zimmer.
Under cross-examination by Zimmer
Rudolph stated that he bore no knowledge of a letter circulated by
Gentech after 8 August 2008
recording that the respondents were
interdicted and restrained from dealing with Gentech’s
suppliers. He confirmed that
the calls made by Zimmer to him would
not have been recorded.
Zimmer then questioned Rudolph about
a telephone call he had made to him, allegedly on 5 August 2008
(which, Zimmer advised me,
was the last telephone call he had made
to Rudolph). Rudolph’s responses were not a model of clarity.
He conceded that
because there had been telephone calls there might
have been one on 5 August (but he could not confirm the date). He
appeared
to concede that it could be that a Ureflex drawing was
submitted to him to enable him to quote in respect of an order and
that
he stated that because Ureflex was not a customer it would have
to pay cash, and that Zimmer then asked for his banking details.

However, when I then asked him where he got the name ‘Ureflex’
he said he picked up the name during the later conversation
with
Anderson (in January/February 2009).
Questioned by Reddy as to whether he
might not have confused an alleged conversation during December 2008
with the conversation
that Zimmer had put took place in August,
Rudolph was firm in his negative answer. The conversation during
December he could
recall quite clearly.
Questioned thereafter again by Zimmer
he was taxed with his statement that they had spoken on hundreds of
occasions. He conceded
the proposition that it was ‘mainly
once every three or four months’ while Zimmer was working for
Gentech that the
telephone calls took place. His initial evidence
was therefore an overstatement (although Zimmer himself later
testified that
it was over a period of some eight years that there
was contact between him and Rudolph). But he rejected the next
proposition
that anyone who telephoned could easily say that he was
‘Zimmer’ with the rejoinder that Zimmer had a very
distinctive
voice, that he was able to recall. (The epithet ‘very
distinctive’ remained, correctly in my view, unchallenged by

Zimmer. In fact, he conceded in his own evidence that his voice was
distinctive and would ‘obviously’ be recognised
by
Rudolph).
The further evidence tendered on
behalf of the respondents related to
inter alia
telephone
records. It would be convenient to refer first to the evidence of
Zimmer. He placed before me his cellphone records
for the first part
of December 2008 (exhibit AA) (as well as exhibit BB, a letter from
Rudolph stating that he had been contacted
by Zimmer; exhibit CC, a
fax invoice from Brake Supplies confirming a delivery on 11 December
2008 of a consignment to Raytech;
exhibit DD, stated to be an order
placed by Raytech with Powertech on 17 November 2008).
Zimmer pointed out that his cellphone
records did not reflect any calls to Powertech. He reiterated that
he had withdrawn from
Ureflex on 8 October 2008 and that a number of
calls made from Ureflex’s premises to Powertech during 1 to 12
December
2008 (as reflected on exhibit Z, which Belling had already
handed in after his recall to the witness box) were not, and could
not have been, made by him.
In explanation of a relatively large
number of calls to Belling and Reddy reflected on exhibit AA, Zimmer
stated under cross-examination
that they were in connection with the
A & D application (at which time Gentech’s replying papers
in that application
had already been filed) and with the liability
of each of the respondents in the sum of R50 000,00 in respect of
the costs of
the interdict proceedings. Zimmer denied that these
telephone calls evidenced his continued involvement with Ureflex.
He agreed that the order placed with
Powertech in the name of Raytech was an order for products required
by Continental Tyres,
a client of Gentech. He, Zimmer, had had a
good relationship with representatives of Continental Tyres, and had
supplied them
with similar products previously.
As indicated earlier Belling
introduced into evidence Ureflex’s telephone records for the
period 1 to 12 December 2008 (exhibit
Z), which reflected a number
of calls to Powertech. His further evidence was that he had no
knowledge of the Raytech order placed
with Powertech. At no time
during the period in question was Zimmer at the premises of Ureflex
and therefore the calls could
not have been made by him. The only
possible persons who could have done so were Belling, Reddy,
Belling’s wife, Chellew
or someone called Austin (who worked
for Brake Supplies). As far as Chellew was concerned, it was
Belling’s averment that
he made use of the facilities of
Ureflex from time to time (which Chellew, who on this score
testified before Belling, mooted
as a possibility). He did, however,
record that on his enquiry Raytech had not been able to shed any
light on the telephone calls.
Taxed with the fact that the legal
advice received from Friedman was that Ureflex had to keep itself at
arm’s length from
Chellew, Belling averred that that advice
covered an admonishment against Ureflex feeding Chellew with the
names of customers
to be approached, and did not relate to Ureflex
making their facilities available for use by Chellew.
I turn now to consider the further
evidence of Chellew adduced pursuant to my having granted leave to
the respondents to recall
him as a witness. (I deal under the next
heading with the coming into being of the relationship between
Chellew and Ureflex).
Belling led Chellew in evidence. Preparatory
to doing so Belling handed in a number of documentary exhibits.
Exhibit W2 was a
fax dated 17 November 2008 allegedly addressed by
Chellew to a certain Noni (said to be someone employed by
Powertech). The fax
requested a quotation on the supply of a
quantity of insulation boards in accordance with the accompanying
drawings. It concluded
as follows:
‘
Please
fax quotation to 086 531 0312 – thank you!’
Exhibit W1 was a quotation dated 19
November 2008 submitted by Chellew (Raytech) to Continental Tyres
for the supply of insulation
boards. Exhibits W3 – 5 were said
to be drawings of insulation boards. Exhibit W4 – 5 were rough
drawings and exhibit
W3(1) and (2) were formal drawings dated 8
November 2008. Exhibit W6, later handed in by Chellew, was a sales
order acknowledgement
dated 5 December 2008 addressed by Powertech
to Chellew in respect of insulation boards. It was sent to fax no.
041 373 0811.
Chellew testified that in the course
of what he termed a normal sales call on Continental Tyres an
enquiry was made of him by
a Mr Weyers of Continental Tyres
concerning the supply of insulation boards. Chellew measured up some
boards on the premises
and made rough sketches thereof (exhibits W4
– 5, drawn in his diary on pages dated 4 and 5 November 2008).
He thereafter
prepared the final drawings, exhibits W3(1) and (2).
He thereafter faxed exhibit W3 to
Noni, received a quotation from him, and thereafter submitted a
quotation to Continental Tyres
(exhibit W1). Exhibit W6 was
Powertech’s invoice to him.
He had known how to contact Powertech
as he had ‘googled’ it on the internet and secured their
telephone number, and
had called them. Zimmer had nothing to do with
the order in question. He, Chellew, had never heard of a man called
Rudolph at
Powertech.
With reference to exhibit W2 Mr
Ford
enquired of Chellew if the fax no. therein was Chellew’s.
Chellew confirmed that it was and stated that he was sure; it
was,
he said, ‘a G-mail fax’. Mr
Ford
then showed
Chellew exhibit Y, a Ureflex business card earlier made available by
Belling, and pointed out that the fax no. on
exhibit W2 was the same
as that on the business card. The response was that Chellew (who was
clearly discomforted) would have
to check. When pressed Chellew
mooted the possibility that at the time he might have been ‘busy
setting up fax lines’.
He confirmed that he had never spoken
to Rudolph on the telephone. He had, however, had had several
telephone conversations with
Noni, who had queries about his
drawings, but he specifically stated that these had taken place
during November 2008.
During questioning by me Chellew
stated that he had sent the fax to Noni, exhibit W2, from his,
Chellew’s, ‘home fax’.
Asked to explain the
reference to Ureflex’s fax no. in exhibit W2 he suggested that
it might have been a mistake on his
part. The quotation from Noni,
so Chellew confirmed, was sent to his ‘personal home fax at
the time’ because he had
not ‘set up his fax’ (ie
a ‘free fax on G-mail’). How it came about that
Powertech’s quotation
(which Chellew said he had at home, but
never produced) came to be sent to Chellew’s home fax no., and
not to the number
stated on exhibit W2, was not initially explained
by him. His evidence became increasingly confusing. It was then
stated that
he had sent exhibit W2 from his home (although that is
nowhere reflected on the exhibit) and that is why the quotation came
back
to his home fax no., and he added that he was sure that he had
told Noni to send the quotation, not to the no. recorded on exhibit

W2, but to another no. He pointed out that exhibit W6 was sent to
his home fax no., but immediately thereafter stated that he
did not
recognise the recipient fax no. on exhibit W6, and could offer no
explanation of why Powertech would have utilised that
number.
Chellew then resorted to the suggestion that he might have used
someone else’s fax no. Asked how it was that Ureflex’s

fax no. appeared on exhibit W2 he said he might have used it because
his fax was not yet set up and he was dealing with Ureflex
at the
time concerning polyurethane products. His intention was that when
Ureflex received the quotation from Powertech they
would pass it on
to him. He suggested that he might have communicated with Ureflex on
that score because he did not have a fax
no. at home at the time.
Ureflex would have been a convenient port of call for him, as he was
picking up parts there and getting
quotations. Eventually, he stated
that he did not think that there was any response from Noni to the
Ureflex no. reflected on
exhibit W2; then said that the quotation
was sent to his home fax no. which he had already set up, or
possibly it was sent to
his wife’s fax no. at her work (a
possibility not explained by him).
Under further cross-examination by Mr
Ford
he stated that the number on exhibit W6 was
not
his personal fax no. at home, and he did not recognise it. His next
suggestion was that his next door neighbour might have ‘loaned’

him a fax, as he could connect any fax no. to his home telephone
no., a suggestion that graduated to a firm averment.
It may be noted that there was no
suggestion by Chellew that, apart from the possibility that he might
have used Ureflex’s
fax facilities, he also made use of
Ureflex’s telephone. In fact, he excluded that he had any
telephone conversations with
Powertech during December 2008.
In large measure the remarks made
earlier in respect of the credibility of Stuurman
vis-à-vis
that of the respondents apply
mutatis mutandis
in respect of
the credibility of Rudolph
vis-à-vis
that of Zimmer.
Again, Zimmer’s claim that he withdrew from Ureflex on 8
October 2008 does not enhance the credibility
of his evidence. It
may be added that Zimmer’s last proposition to Rudolph carried
no persuasion. It was not in dispute
that the dealings in question
were with Rudolph and that the transactions recorded in exhibits O
and P followed thereon. It is
inconceivable that the person with
whom Rudolph had the dealings would, for some reason or other, have
passed himself off as
Zimmer.
It is clear that telephone calls were
made from Ureflex’s premises to Powertech during the first
part of December 2008.
These calls tie in with Rudolph’s
evidence. They were not made by Chellew. There was no reason why
anyone from Brake Supplies
would have had the calls (12 in number)
with Powertech. It must therefore have been someone from Ureflex.
Chellew’s evidence
was of such a poor calibre that little
store can be set by it. How his alleged dealings with Powertech
fitted in with Zimmer’s
contact with Rudolph need not be
decided. The only inference is that there was collusion between
Raytech and Ureflex in respect
of the transaction with Powertech.
I accept the evidence of Rudolph as
true and reject that of Zimmer (on behalf of himself and the other
respondents) and the parts
of Chellew’s evidence inconsistent
with that of Rudolph, as false. The dealings with Powertech by, and
on behalf of, the
respondents, clearly constituted a breach of
paragraph 2.3 of the interdict order. Again, no basis was put
forward to question
whether the contravention was wilful and
mala
fide
. The respondents accordingly acted in contempt of the
interdict order.
The Graymaur application –
the fifth issue
This issue revolves around Gentech’s
contention that for the purposes of circumventing the terms of the
interdict order
Ureflex and Chellew, trading as Raytech, devised an
arrangement whereby Raytech would be interposed between Ureflex and
entities
listed on annexure “X”, and that Raytech would
merely be a front for Ureflex in dealings with such entities.
Chellew’s background
Chellew is Belling’s
brother-in-law. He is also acquainted with Reddy and Zimmer, the
lastmentioned living in the same area
as he. He was aware that these
three respondents had commenced conducting business under the banner
of Ureflex.
Chellew was previously employed by an
entity styled Multitrade, another enterprise of McClelland (the
majority member of Gentech),
involved in the sale and distribution
of cutting tools. After three years in that employment he left same
during 1993. Multitrade
shared office premises with Gentech, but
Chellew had not in any way been concerned with the conduct by
Gentech of its business,
and his work had nothing to do with
polyurethane products.
After leaving Multitrade Chellew
entered another sector of the engineering industry where he was
involved in sales. As a result
of a downturn and fall off in
business in 2008 Chellew went into what was referred to as
semi-retirement as a consultant for
Culconi, the firm he was then
working for. It was a business of a Mr Buzzy van Vuuren.
During 2008, in circumstances to be
sketched below, Chellew emerged from semi-retirement to enter the
polyurethane business under
the style of Raytech. In his affidavit
filed in the
Anton Piller
proceedings Chellew voiced a bare
denial of an allegation that he had no knowledge of the polyurethane
business. Conspicuous
by its absence was any detail furnished by him
of what the knowledge was that he had acquired and the manner of the
acquisition.
Chellew had in fact never before been involved in the
polyurethane industry and he did not at any stage acquire any
experience
of the manufacture or costing of polyurethane products.
His testimony during the hearing of oral evidence merely underscored

that while he was an experienced businessman, and had general
knowledge of engineering and manufacturing concerns in the Port
Elizabeth area, and what their requirements might be, which enhanced
his marketing abilities, he had no experience in the marketing
of
polyurethane products, and, specifically, the costing and quotations
in respect thereof.
Chellew’s entry into the
polyurethane market
Chellew’s testimony during the
hearing of oral evidence, as to how it came about that he entered
the polyurethane business,
proceeded as follows. Van Vuuren
telephoned him to advise that he could expect a call from Friedman.
That call came and Friedman
asked him to come and see him and
enquired whether he would be interested in starting a business
selling polyurethane products.
On his enquiry, he was told that the
products would be sourced from Ureflex. He said he was interested
and went to see Friedman
to discuss the matter with him.
He advised Friedman that he was
Belling’s brother-in-law. Friedman said that he should not be
in contact with Belling. Chellew
was aware of the interdict order
and stated that he consulted Friedman in connection therewith, and
was advised that he could
not discuss any clientele with Belling.
The advice in fact related to each of the first three respondents.
He did not do so and
in fact at no stage did he discuss with Belling
how his business would operate.
Friedman advised him, however, that
when he needed to submit quotations to any entities, he should take
the relevant drawings
(and/or other specifications) received from an
entity, to Belling. The latter would then give him a quotation, on
which he in
turn could base his own quotations to the entity. That
was the only purpose for which he visited Ureflex’s premises.
Further comments by Chellew were
that, as he put it, he knew everybody in Port Elizabeth and exactly
where all products were sold
in Port Elizabeth. Virtually all the
relevant firms in Port Elizabeth used polyurethane products. He
therefore did not require
any leads as to which firms he should
approach. His only source of polyurethane products was Ureflex and
he knew that he was
dealing with many customers of Gentech. While he
had not previously worked with polyurethane products, his forte was
achievement
as a sales person.
It requires to be recorded that
Belling’s oral testimony as to the contact Chellew had with
Ureflex was substantially coincident
with that given by Chellew.
Friedman’s evidence in chief in
respect of Chellew was as follows. He had developed a relationship
with van Vuuren from
whom he purchased a farm. Van Vuuren was
suffering from cancer and became very depressed. (He passed away
during 2009). At a
stage after the interdict order had been granted
(of which van Vuuren was aware) Friedman, in an attempt to get van
Vuuren to
shake off his depression, sought to encourage him to go
back into business. What he suggested was the polyurethane business,

the profits of which had become apparent to Friedman. Van Vuuren
suggested that he get in touch with Chellew; if the latter were

interested, perhaps he, van Vuuren, would be interested.
Friedman telephoned Chellew and told
him to contact van Vuuren. Chellew must have done so as he soon
afterwards came to see Friedman
(ie during August/September 2008,
not long after the grant of the interdict order). In the final
result, van Vuuren did not want
to get involved as he was too sick.
When Friedman conferred with Chellew he was startled to learn that
Chellew was Belling’s
brother-in-law. He accordingly advised
Chellew that if he was going to go into the polyurethane business,
he would have to do
so ‘at arm’s length’
vis-à-vis
Ureflex; he should not get involved in any conspiracies or collusion
with his brother-in-law.
He, Friedman, gave similar advice to
Belling; if Chellew wanted to enter the polyurethane business that
would be his decision,
but Belling would have to keep his distance.
Friedman’s email of 5 September 2008 to Belling (exhibit B)
read
inter alia
as follows:
’
10.
As far as Raymond Chalut is concerned, my understanding is that he is
working part time for Kulkoni. As he worked for Gentech,
he knows
exactly what is going on with their business. The question as to
whether or not Raymond going into opposition would not
be arms length
is easily answered.
11. The answer is the
following:
He knows the business
as well as anybody else;
He is semi-retired from
Kulkoni;
He has no love for
Gentech;
He is Keith’s
brother-in-law and knows all of you quite well too.
If he wants to go into
business one cannot challenge his motives.
As long as it is arms
length and Raymond goes into business independently there is nothing
anybody can do about it.
If it is his intention
to do so, then I would prefer it if he consulted me so that I can be
sure that the structure is not capable
of being seen as an extension
of your business.
I say this not to try
and avoid or circumvent the Court Order, but to create a legitimate
structure that does not circumvent the
Order.
Your books of account
are going to be inspected under the microscope in the forthcoming
trial. We have to be certain that you
do not expose yourself to
additional damages.’
There was a follow-up email dated 7
September 2008. Part of that communication read as follows:
‘
4.
As far as doing future business is concerned, I understand that
Raymond Chalut is considering going into business in opposition
to
Gentech.
5. You may recall that I
acted for Ray when he left Gentech and went to work for Buzzy Van
Vuuren (Kulkoni).
Raymond knows the
business better than anybody else. The fact that he is Keith’s
brother-in-law is of no consequence. If
Raymond wants to go into
business, he is free to do so and he is also free to support you in
whatever manner he sees fit.
What you are not allowed
to do is breach the terms of the court order by utilising
confidential information for the benefit of
any third party or by
visiting the customers.
If Raymond wants to go
and see Transwerk and take orders from Transwerk, he is free to do
so and is free to place the order on
you. You may not deal with
Transwerk. Raymond may.
However, it is important
that this relationship (if it transpires) is completely arms length.
There are going to be allegations
made that Raymond is Keith’s
brother-in-law and that Keith, yourself and Kevin are feeding
Raymond. That is not to happen
under any circumstances. Raymond is
more than capable of doing business on his own account and if his
motives are to give business
to Keith, then well and good. There is
nothing wrong with having such a motive.
The Order against you is
going to be policed in whatever form. You need to be sure that you
keep your nose clean.
To cut a long story
short, this is the position.
You are free to do
business with any customer not listed on Annexure X.
You are free to do
business you want with Raymond Chalut, or any third party who places
orders on you, even if those orders are
to be delivered to Transwerk
or customers listed on Annexure X.
You are not free,
however, to involve yourself in discussions with these potential
customers for the onward supply. It has to
be arms length.
Why I like the idea of
Raymond is that he really knows all the Gentech customers and he has
relationships with most of those people.
He can call upon these
people and take whatever orders he wants and establish whether he
can place the orders on yourselves.’
Certain of the statements in the
correspondence were factually incorrect: Chellew had never worked
for Gentech, he did not know
exactly what was going on in Gentech’s
business, he did not know the business as well as anyone else, he
did not know all
the Gentech customers, nor did he have
relationships with most of them. In fact, as indicated earlier he
knew very little of
Gentech’s business. On analysis, however,
I am not persuaded that these incorrect statements affect the
decision to be
made on the issue presently under discussion.
Asked during cross-examination why he
felt it necessary to get Chellew involved, Friedman intimated that
that was not the way
to put it. His intention was to encourage van
Vuuren to put some purpose back into his life. It was because van
Vuuren intimated
that he would do business with Chellew that there
was contact between Friedman and Chellew, with the former requesting
the latter
‘to do something’ with van Vuuren. Van
Vuuren, however, decided against involvement, and thereafter Chellew
came
to see him, Friedman. Because of the relationship between
Chellew and Belling, he, Friedman, was on his guard and had to
address
the issue properly.
It is not surprising that the
dealings between Ureflex and Chellew were viewed askance by Gentech
and that the latter invoked
the contention that the arrangement was
in essence the interposing of Raytech between Ureflex and entities
listed on annexure
“X”, with a view to circumventing the
provisions of the interdict order. The history of the matter and the
deficient
credibility of the respondents and of Chellew underscore
such an approach. And I must also immediately express reservations
about
the validity of the advice given by Friedman.
However, on Friedman’s
evidence, it was by chance, as it were, that Chellew became
interested in entering the polyurethane
business in competition with
Gentech, and whatever suspicions one may harbour, there is
insufficient basis for a finding that
it was with the connivance of
the respondents, with the specific view of circumventing the
interdict order, that Chellew made
his decision to enter the
polyurethane market. In fact, Belling testified that he had no
involvement in Chellew’s entering
the polyurethane market.
It is so that of necessity (a
necessity of which the respondents must have been aware) Ureflex
would have had to be indirectly
involved in Raytech’s dealings
with entities listed on annexure “X”. But even if it
were to be found that factually
the arrangement set in place
constituted a breach of the interdict order, the fact remains that
Friedman gave the advice referred
to above, and there is again an
insufficient basis to found a rejection of the respondents’
assertion that they acted on
the advice in the
bona fide
belief
that they would not be contravening the interdict order, and I am
unable to hold that the advice was so manifestly wrong
that the
respondents must have realised that they could not, or should not,
act on it. Accordingly (subject to the one qualification
referred to
below), wilfulness and
mala fides
were not established, and
no declaration of contempt of court can follow.
That is, however, not the end of the
matter. I have already found that Ureflex and Raytech acted in
cahoots in the matter of obtaining
supplies from Powertech, an
entity listed on annexure “X”, for onward supply to
Continental Tyres, also an entity
listed on annexure “X”.
This constituted an attempt to circumvent the interdict order and at
the same time amounted
to contact with and solicitation of,
Powertech, and indirect dealing with it and Continental Tyres by
Ureflex. This conduct was
clearly not of the arm’s length type
embraced within Friedman’s advice. A breach of the interdict
order by the respondents
was established. No basis was put forward
for questioning whether the infraction was wilful and
mala fide
.
The respondents were accordingly guilty of contempt of court.
The Graymaur application –
the sixth issue
This issue concerned certain conduct
on the part of Reddy which Gentech contended constituted contact by
Ureflex with
Goodyear
, an entity listed on annexure “X”,
and which, so it was submitted, at the same time had a bearing on
the relationship
between Ureflex and Raytech.
During January 2009 Gentech and
Raytech submitted tenders to Goodyear for the supply of certain
polyurethane products. The Goodyear
representative in its purchasing
department that dealt with the matter was a Mr Nagan. It appears
that after receiving the quotations
of Gentech and Raytech he called
in Gentech’s representative, pointed out to him that Raytech’s
quotation was more
detailed and requested him to submit a revised
quotation which dealt with the additional detail. Gentech was in the
result awarded
the contract in question.
Reddy became aware of the above
events. Being of the alleged view that Nagan’s conduct, in
disclosing a tender received
from one entity to a competing
tenderer, had been unethical, Reddy sent an email to Mr Clarke,
Goodyear’s purchasing manager,
registering a complaint in
those terms against Nagan. Reddy intended the email to be anonymous,
but unfortunately for him the
email was traced back to him.
It was put to Reddy that he was
aggrieved because the plan, alleged by Gentech, of interposing
Chellew between Ureflex and entities
with which Ureflex could have
no dealings, had in this instance failed; hence, the email. It was
in any event, so it was contended
on behalf of Gentech, contact
between Reddy and an entity listed on annexure “X”, and
therefore a breach of the interdict
order. Reddy resisted both
propositions, and affirmed that his sole purpose had been to bring
what he perceived to have been
unethical conduct of a Goodyear
representative to the attention of the latter’s senior.
Whatever merit there was in Mr
Ford’s
argument on this score, I consider it unnecessary to make any
finding thereanent.
Finding
My conclusion is accordingly that in
the various respects set out earlier in this judgment the
respondents were in contempt of
court.
Sanction
As already mentioned, contempt of
court proceedings are often resorted to, although not invariably so,
for the purpose of securing
compliance with the court order in
question. The 12 month period fixed in paragraph 2.3 of the
interdict order for the prohibition
against the respondents
contacting or soliciting the entities envisaged in the order has
elapsed. However, there remains the
question of the flouting of the
authority of the court, which must attract an appropriate censure.
In addition, the provisions
of paragraphs 2.1 and 2.2 of the
interdict order remain in operation and the terms of the censure
decided upon by this Court
must in part act as an inducement to the
respondents to keep their future conduct within the confines of the
restraints provided
for in the order.
I am persuaded that the present is a
serious case of contempt of court. The conduct of the respondents
was calculated, devious
and persistent, and that was so despite
various proceedings being instituted against them. To a large extent
the defence raised
to Gentech’s contentions was a dishonest
one.
Having said that, I am not persuaded
that censure in the form of immediate direct incarceration is
merited. As far as the personal
respondents are concerned it seems
to me that a prison sentence which is suspended on appropriate
conditions will fit the bill
of bringing home to them the
seriousness of their conduct and this Court’s severe and
unambiguous disapproval thereof.
The conditions of suspension of the
sentences of imprisonment will hopefully at the same time act as an
inducement to the respondents
not again to contravene the interdict
order or any other court order.
A sanction in the form of
incarceration does not arise in the case of the fourth respondent,
Ureflex, which is a close corporation.
It would, however, be
appropriate for a fine to be imposed.
The sanctions I have decided upon
will be set out at the end of this judgment.
Costs
I have already issued costs orders in
respect of a postponement and certain interlocutory applications
made during the course
of the proceedings. For completeness sake
these will be included in the costs orders recorded below. These are
costs on the party
and party scale.
In respect of the two contempt of
court applications there is no reason why the general rule that
costs follow the event should
not apply. Mr
Ford
pressed for
a punitive order of costs on the attorney and client scale. He
pointed, first, to the very nature of the proceedings
which sought
to uphold the dignity of the court, and, second, the nature of the
respondents’ conduct, which I have found
proven, as well as
the unacceptable manner in which the respondents conducted the
various proceedings. I agree with the submissions.
The remaining costs relate to the
Anton Piller
proceedings (instituted against the present
respondents) which were reserved for decision by the court during
the Graymaur application.
In my view, as this judgment reflects,
cognizable use was made of documentation retrieved during or
pursuant to the
Anton Piller
proceedings sufficient to
justify a costs order in respect thereof against the respondents,
the institution of the proceedings
also having been reasonable in
the circumstances. However, I am not persuaded that costs on the
punitive scale are warranted
in this case.
Mr
Ford
pointed out that at
stages in the various proceedings Gentech was represented by two
counsel and he submitted that the employment
of two counsel had been
a prudent course. Accordingly, where applicable, the costs ordered
should include the costs of two counsel.
I am persuaded that the
submission was valid. He also pointed out that at certain stages
counsel was briefed to settle papers
and that unless a specific
order on that score was made the costs attendant on the briefing of
counsel would not be allowed on
taxation. Again, I am persuaded that
an appropriate order should issue.
Order
In case no. 2462/2008 and case no.
1422/2009 the four respondents are declared to be in contempt of
court in the respects
set out in this judgment, relating to
non-compliance with the order of this Court in case no. 1419/2008
dated 8 August
2008.
In respect of the said contempt of
court (taken together for purposes of sanction):
(a) each of the first, second and
third respondents is sentenced to imprisonment for a period of nine
months, wholly suspended for
a period of three years on condition
that he is not again found guilty of contempt of court in the form of
non-compliance with
an order of court, which is committed during the
period of suspension;
(b) the fourth respondent is sentenced
to pay a fine of R10 000.00 (TEN THOUSAND RAND).
The costs occasioned by the
postponement of the proceedings on 22 April 2010 (paragraph 47
above) will be paid by the four
respondents, jointly and
severally, the one paying the others to be absolved.
The costs of the two interlocutory
applications referred to in paragraphs 50 to 83 of this judgment
will be paid by the
four respondents, jointly and severally, the
one paying the others to be absolved, such costs to be taxed on
the party
and party scale.
The applicant’s costs in
case no. 2462/2008 and case no. 1422/2009, to be taxed on the
scale as between attorney and
client, will be paid by the four
respondents, jointly and severally, the one paying the others to
be absolved.
The applicant’s costs of the
proceedings against the four respondents in case no. 486/2009
will be paid by the four
respondents, jointly and severally, the
one paying the others to be absolved.
Where applicable, the costs
referred to above will include the costs attendant on the
employment of two counsel, and the
costs attendant on the
employment of counsel to settle papers.
_________________________
F. KROON
JUDGE OF THE HIGH COURT
APPEARANCES:
For applicant:
EAS Ford SC,
instructed by
Rushmere Noach Incorporated
For respondents:
GJ Friedman of
Friedman
Scheckter, thereafter, in person
1
Fakie
NO v CCII Systems (Pty) Ltd
[2006] ZASCA 52
;
2006 (4) SA 326
(SCA) para [6];
Burchell v Burchell (ECD case no. 364/2006,
[2006] JOL 16722
(E))
paras [8] – [13].
2
Fakie,
n 1 above, para [7].
3
Ibid,
paras [9] and [10].
4
Ibid,
paras [19] and [20]; Burchell, n 1 above, para [26].
5
Ibid,
paras [11] and [17]; Burchell, n 1 above, para [27].
6
Fakie,
n 1 above, paras [41] and [42].
7
HEG
Consulting Enterprises (Pty) Ltd and Others v Siegwart and Others
2000(1) SA 507(C) at 518H.
8
Ibid,
at 518I.
9
Ibid,
at 521H.
10
Ibid,
at 522B.
11
Automotive
Tooling Systems (Pty) Ltd v Wilkens and Others
[2007]
4 All SA 1073
(SCA) para [8].
12
Aranda
Textile Mills (Pty) Ltd v Hurn
[2000]
4 All SA 183
(E) para [33].