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[2011] ZAECPEHC 55
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Prestige Cleaning Services (Pty) Ltd v Volschenk (2891/2010) [2011] ZAECPEHC 55 (13 December 2011)
IN
THE HIGH COURT OF SOUTH AFRICA
(EASTERN
CAPE – PORT ELIZABETH)
CASE
NO.: 2891/2010
In the matter between:
PRESTIGE CLEANING SERVICES (PTY)
LTD
.........................................
Applicant
And
LAMBERTUS
IZAK VOLSCHENK
…...............................................................
Respondent
JUDGMENT
BESHE J:
[1] Applicant brought an application
by way of semi-urgency in terms of the provisions of Rule 6 (12) on
the 19
th
of October 2010 for an order in the following
terms:
2.
That a
rule nisi
do hereby issue calling upon the Respondent
to show cause, if any, on
TUESDAY
the
23
rd
of
NOVEMBER 2010
why an order should not be granted in the
following terms:-
2.1
That the Respondent be interdicted and restrained from being employed
by and/or in any way interested in any company, close
corporation,
firm, undertaking or concern operating anywhere in the Gauteng,
KwaZulu Natal, North West Provinces and Northern Provinces
(“the
prescribed areas”), which renders cleaning and/or other
services connected therewith and ancillary thereto and/or
which
renders pest control services (“the prescribed services”),
within a period of 12 (twelve) months after the 24
th
of
March 2010;
2.2
That the Respondent be interdicted and restrained from directly or
indirectly soliciting business from any past, present and/or
prospective customer of the Applicant with whom the Respondent has
dealt with whilst he was employed by the Applicant (“the
prescribed customers”) for the prescribed services, canvassing
business in respect of the prescribed services, rendering
any
prescribed services to any prescribed customer or soliciting
appointment as agent or representative of any company, close
corporation, firm, undertaking or concern in respect of the
prescribed services, within a period of 12 (twelve) months from the
24
th
of March 2010;
2.3
That the Respondent be interdicted and restrained from using any
confidential information in his possession relating to the
Applicant,
including:
2.3.1
the Applicant’s entire customer lists, including present
customers, past customers and prospective customers;
2.3.2
the terms, conditions, value and/or period of all contracts of the
Applicant with its customers;
2.3.3
the location at which the contracts are carried out;
2.3.4
the number of employees of the Applicant engaged in the carrying out
of any contract for any customer of the Applicant;
2.3.5
details of terms and conditions of employment of employees of the
Applicant, including but not limited to salaries and other
benefits
payable to such employees;
2.3.6
the costings and profitability calculations of contracts of the
Applicant with its customers;
2.3.7
details of training methods and programs used by the Applicant;
2.3.8
know-how in the Applicant’s techniques relating to the
rendering of cleaning services and any other services connected
therewith;
2.3.9
details of any control systems, which are used by the applicant;
2.3.10
all of the Applicant’s trade secrets, business connections and
other confidential information pertaining to the Applicant’s
business;
2.4
That the Respondent forthwith return all documents, notes and any
copies thereof obtaining during the course of his employment
by the
Applicant to the Applicant together with any other items in his
possession that are the property of the Applicant;
2.5
That the Respondent be directed to delete all copies of confidential
information of the Applicant contained in the electronic
format from
whatever memory source such information may be retained;
2.6
That the Respondent be ordered to pay the costs of this application;
3.
That the orders in paragraphs 2.1 to 2.5 hereof shall operate as an
interim order pending the final determination of this application;
and
4.
That further and/or alternative relief be granted to the Applicant.
[2] On the 7
th
of October
2010 respondent filed a notice of intention to oppose applicant’s
application and proceeded to file an answering
affidavit. At
paragraph 6 of his answering affidavit respondent states
inter
alia
that “
However I
am not opposing the application and as a display of my
bona
fides
vis-a-vis
the applicant with whom I had a
successful working relationship for twelve years, I have instructed
my attorney of record and my
counsel to agree to the terms of the
notice of motion ... ...” I do this purely in an attempt to
display my
bona fides
as I am not in breach of any of
the terms of my restraint of trade agreement. I am not operating any
business in the Republic of
South Africa but I am trading only in
Mozambique. Accordingly the terms of the restraint of trade do not
affect my business at
all.
[3] At paragraph 7 respondent
continues: “
For this
reason I have instructed my attorney of record and my counsel to
agree to the terms of the Notice of Motion, but as will
become
evident infra, I do not agree to paying the costs of the applicant.
The application is ill-advised and is a direct function
of incorrect
information divulged by Mrs Engelbrecht to the applicant”.
[4] On the 19
th
of October
2010 a
rule nisi
in terms of the Notice of Motion was issued
with the return date being the 2
nd
of December 2010.
[5] On the return date, respondent
still maintained his stance that he was conceding the relief sought
by the applicant, but that
he was not agreeable to paying the costs
of the applicant.
[6] It is necessary to briefly sketch
the background to this application. Applicant is a company, as its
name suggests, that provides
specialized cleaning services to
inter
alia
health care, hospitality, commercial, retail, industrial,
education, property and food production industries, and operates
throughout
the Republic of South Africa.
[7] Applicant has over the years
developed specific systems, procedures and methods of conducting
business, which it believes gives
it an advantage over its
competitors. According to the applicant, these systems, procedures
and methods of doing business are highly
confidential.
[8] Respondent took employment with
the applicant as a sales consultant, specialized services, in June of
1998 whereupon respondent
was required to read and sign a
confidentiality undertaking and restraint of trade.
[9] As respondent progressed through
the ranks he would be required to sign a confidentiality undertaking
as well as a restraint
of trade upon reaching each level or rank in
his employment.
[10] 22.4 The operative part of the
restraint of trade reads thus:
“
I,
the undersigned, BERTUS VOLSCHENK undertake in favour of PRESSTIGE
CLEANING SERVICES (PROPRIETARY) LIMITED (“the company”),
and its successors in title, (being the person, company, close
corporation, firm, undertaking or concern) that acquires the goodwill
of the business through its shareholding in the Company, and / or has
acquired by cession the right to enforce the restraints embodies
herein as follows:
I
shall not, either alone or jointly for the period during which I am
employed by the company and for a period of 12 months after
the
termination of any employment with the company, for whatsoever
reason (“the restraint period”):-
whether
the
(sic)
employee, proprietor, partner, director,
shareholder, member, consultant, contractor agent, representative,
assistant or otherwise,
and whether for reward or not, directly or
indirectly;
anywhere
in the GAUTENG, KWA-ZULU NATAL, WESTERN CAPE, NORTHERN CAPE,
EASTERN CAPE, MPUMALANGA
(sic)
, FREE STATE, NORTH WEST
PROVINCES & NORTHERN PROVINCES (“the prescribed areas”);
be
employed by and/or engaged and/or in any way interested in any
company, close corporation, firm undertaking or concern operating
in
any part of the prescribed areas, which renders cleaning and or other
services connected therewith and ancillary thereto and/or
which
renders pest control services (“the prescribed services”).
I
further undertake that neither I nor any company, close corporation,
firm, undertaking or concern in or by which I am directly
or
indirectly interested and/or employed, shall during the restraint
period and whether for reward or not, directly or indirectly
–
encourage
or incite or persuade or induce any employee of the Company, who
was employed whilst I was employed by the Company
and who is
engaged or participates in the prescribed services, to terminate
his employment by the Company and/or become employed
by or,
directly or indirectly, in any way interested in or associated with
any other company, close corporation, firm undertaking
or concern;
furnish
any information or advice (whether oral or written) to any past,
present and / or prospective customer of the Company
with whom I
have dealt or whom I have approached to do business (a “prescribed
customer”) that I intend to or will
(whether as proprietor,
partner, director, shareholder, member, employee, consultant,
financier, agent, representative or otherwise,
and whether for
reward or not, directly or indirectly), be interested or engaged in
or concerned with or employed by any company,
close corporation,
firm, undertaking or concern carried in the prescribed areas which
renders the prescribed services or any
services similar thereto
during the restraint period;
furnish
any information or advice (whether oral or written) to any
prescribed customer or use any other means or take any other
action
which is directly or indirectly designed, or in the ordinary course
of events calculated, to result in any such prescribed
customer
terminating its association with the Company and / or transferring
its business to or accepting the rendering of any
prescribed
services from any person other than the Company, or attempt to do
so.
Without
derogating from the obligations imposed by this undertaking, I
undertake that neither I nor any company, firm, undertaking
or
concern in or by which I am directly or indirectly interested,
engaged, concerned or employed will during the restraint period
directly or indirectly, whether as proprietor, partner, director,
shareholder, employee, consultant, contractor, financier, agent,
representative, assistant, trustee or beneficiary of a trust or
otherwise in any part of the prescribed areas and whether for
reward
or not:-
Solicit
business from prescribed customers for the prescribed services.
Canvass
business in respect of the prescribed services.
Render
any prescribed services to any prescribed customer.
Solicit
appointment as agent or representative of any company, close
corporation, firm, undertaking or concern in respect of
the
prescribed areas.”
22.5
The Respondent furthermore undertook and agreed in clause 4 of the
restraint order that:
“
I
shall surrender to the employer on demand, any
(sic)
in any event upon termination of my employment with the Company any
documents or records (including written instructions, notes
or
memoranda) and any copies thereof which relate to the business of the
Company, irrespective of who the author was of such document
or
record.”
[11] In respect of confidentiality
respondent signed the following undertaking:
“
I,
the undersigned BERTUS VOLSCHENK, undertake in favour of PRESTIGE
CLEANING SERVICES (PTY) LTD (“the company”), by
whom I am
employed as SUPERVISOR-EASTERN CAPE.
During
the course of my employment and upon termination of my employment
with the Company I shall not disclose to any third party
any
confidential information of any nature whatsoever which I may obtain
from or relating to the Company, its holding company
or
subsidiaries, howsoever such information may be disclosed to myself
including, without limiting the aforegoing, whether orally
or
visually;
Without
derogating from the obligations in terms of Clause 1, I further
undertake not to disclose to any third party, for any
reason
whatsoever (and without limitation), the following information:-
The
Company’s entire customer lists, including present customers,
past customers and prospective customers (“the
customers”).
The
terms, conditions, value and / or period of all contracts of the
Company with the customers.
The
location at which contracts are carried out.
The
number of the employees of the Company engaged in the carrying out
of any contract for any customer of the Company.
Details
of terms and conditions of employment of employees of the Company,
including but not limited to salaries and other benefits
payable to
such employees.
The
costings and profitability calculations of contracts of the Company
with customers.
Details
of training methods and programmes used by the Company.
Know-how
in the Company’s techniques relating to the rendering of
cleaning services and any other services connected therewith.
Details
of any control system, which are used by the Company, including
control systems for the implementation and administration
of which
the employee is responsible.
All
the Company’s trade secrets, business connections and other
confidential information pertaining to the Company’s
business, all of which constitutes confidential information of the
Company.
I
further acknowledge that the information referred to in Clause 2 and
any other confidential information is being made available
to me
solely for the purpose of fulfilling my duties in terms of my
contract of employment with the Company and for no other
purpose
whatsoever, and that such information would not have been made
available to me but for this undertaking.
I
shall not directly or indirectly use for my own benefit or for the
benefit of any other, such information other than for purposes
contemplated in Clause 3, unless any part of such information is or
becomes public knowledge and in the public domain by reason
of
becoming property other than through an act or omission on my part.
Upon
termination of my employment the Company, I shall return all
documents, notes and any copies thereof obtained during the
course
of my employment by the Company.
I
acknowledge that I have discussed the contents of this document with
my employer and all questions raised by me regarding this
clause
have been explained to me to my satisfaction.”
[12] Respondent tendered his
resignation from the applicant in February of 2010 his last working
day being 24 March 2010.
[13] In his founding affidavit,
Alistair Fulton, applicant’s General Manager contends that on
the 9
th
of August 2010 he received a telephone call from
Mrs Engelbrecht of S E Industries a company that is also in the
cleaning industry
and is a competitor of the applicant in Port
Elizabeth, that respondent had divulged applicant’s
confidential information
to her.
[14] According to Mr Fulton, during
discussions with Mrs Engelbrecht he learnt that the latter had
entered into discussions to form
a partnership with the respondent,
that would conduct business in the cleaning industry which
partnership then started operating
from the beginning of January
2010.
[15] Mrs Engelbrecht also handed Mr
Fulton a memory stick that she alleged was given to her by the
respondent which upon being downloaded
was found by Mr Fulton to
contain extremely confidential information pertaining to applicant’s
business. I do not propose
to detail the information allegedly
contained in the memory stick aforementioned, as well as other
allegations made by Mrs Engelbrecht
about information divulged to her
by the respondent.
[16] Applicant believing that the
respondent was in breach of the restraint of a trade agreement
between him and the applicant,
and that by so doing was causing
serious prejudice to the applicant’s viability as well as
financial loss, instituted these
proceedings.
[17] Respondent contends that the
application is ill-advised and is a result of incorrect information
divulged by Mrs Engelbrecht
to the applicant. This is contained in
his answering affidavit under the heading:
THE
BACKGROUND TO MY RELATIONSHIP WITH MRS ENGELBRECHT:
“
8.
In or about September 2009 I identified a business opportunity in the
Republic of Mozambique to provide cleaning and related
services in
that country. I was on holiday in Maputo with my family when I
identified the lack of cleaning services in that country.
However, I
needed a financier as it is capital intensive to commence cleaning
operations. For this reason I approached Mrs Engelbrecht,
who was
also employed in the cleaning industry. She is a direct competitor of
my erstwhile employer, Prestige Services. I clearly
explained to her
that I am under a restraint of trade and do not have any intention to
act in breach of my contractual obligations
in South Africa. It was
agreed between the two of us to register a company in the Republic of
Mozambique. This was duly done and
both of us acquired 50%
shareholding in the company. Both myself and Mrs Engelbrecht have
substantial experience in the cleaning
industry and accordingly I
envisaged that the company will achieve success in Mozambique.
9.
It had always been the agreement that the Engelbrechts would provide
the startup capital for the company (Into Africa Cleaning
Solutions).
However, after approximately three months it became apparent that the
Engelbrechts are not in a financial position
to provide the startup
capital and accordingly we mutually agreed that our business
relationship be terminated. However, Mrs Engelbrecht
fraudulently
deregistered my 50% shareholding in Mozambique without my knowledge.
This activity was identified by the Mozambique
Police and she is
currently under investigation for fraud. I believe that a warrant for
her arrest had been issued in Mozambique,
however, I cannot verify
this fact.
10.
Subsequent to the termination of our business relationship I
registered a new company in Mozambique which is currently trading
successfully. I emphasize that the business model of my company in
Mozambique is wholly removed from any of the trade secrets and
confidential information I obtained during my employment with
Prestige Cleaning. I do not intend to elaborate save to say that
the
Mozambican Republic has a separate body of law and business
practices, a different language and that the knowledge which I
acquired during my term with Prestige is of no benefit to me at all.
The business model is simply too remote.
11.
I have no idea why Mrs Engelbrecht has acted in this malicious manner
to divulge false information to the Applicant. The true
facts how the
information on my memory stick came into the possession of Mrs
Engelbrecht are as follows:
12.
In about 7 June I visited the residence of the Engelbrechts in the
evening. I needed to make use of their printer in order to
print
certain quotations for our company in Mozambique. I provided a memory
stick with personal information to Mrs Engelbrecht’s
husband.
He downloaded the information from the memory stick onto their
computer. I confronted him about it and requested him to
delete the
same as it was personal information. Apparently he did not do so.
Under no circumstances did I divulge any of the information
willingly
to the Engelbrechts at all. During my employment with the Applicant I
often worked after hours at home. As a result I
had quotes on my
memory stick to refine such in the evenings after work. This was a
function of my work ethic. I forgot the Prestige
data is on the
stick. I did under no circumstances permit the data to be downloaded
by Engelbrecht. I have since deleted all Prestige
data in my
possession as it is of no use to me.”
[18] From the aforegoing there appears
to be a dispute of fact as to whether or not respondent is in breach
of the terms of the
restraint of trade agreement and confidentiality
undertaking. It is however trite that the existence of a dispute of
fact does
not necessary preclude the court from granting relief on
Notice of Motion. If the real issue is capable of resolution on an
acceptance
of facts which are common cause or indisputable, relief
may be ordered without reference to the facts in dispute. In my view
the
denial by the respondent of what is alleged by the applicant does
not raise a real or
bona fide
dispute of fact. (See
Plascon-Evans Paints Limited v Van Riebeeck Paints
(Proprietary) Limited
[1984] ZASCA 51
;
1984 (3) SA 623
AD 634E – 635C.
)
[19] It appears to be common cause
that applicant’s highly confidential information that was in
the possession of the respondent
found its way to the hands of
applicant’s direct competitor. That in itself in my view was
sufficient reason for applicant
to apprehend that its rights had been
infringed. I am satisfied that the applicant was justified in
instituting these proceedings.
[20] In addition, as indicated
earlier, the relief sought by the applicant is not resisted by the
respondent. The only issue that
is resisted is the prayer that the
respondent be ordered to pay the costs of this application.
[21]
Messrs Scott
for the
applicant, and
Welgemoed
for the respondent pointed out that
the general rule as regards costs is that they should follow the
result.
[22] It is however trite that a court
can, for a good reason, deprive a successful party of costs in whole
or in part.
[23]
Mr Welgemoed
submitted
that this was one such case where the court should deprive the
successful party of costs. He argued that the entire application
was
unnecessary and could have been avoided by a single letter. He argued
further that even after the interdict has been conceded,
the
applicant proceeded to file no less than 9 affidavits in reply.
[24]
Mr Scott
submitted that
the applicant was, on the information available to it, entitled to
bring the present application and argues that
respondent should be
ordered to pay the costs of the application.
[25] I have already made a finding in
this regard – namely that the applicant was justified in
bringing this application.
[26] The question however is whether,
respondent having conceded the granting of the interdict, was it
necessary for the applicant
to file further affidavits.
[27]
Mr Scott
argued that it
was necessary to do so because the respondent did not tender costs
upon conceding the granting of the relief sought
by the applicant,
but proceeded to place before court a factual version of events which
is patently false.
[28] I am not persuaded that after
respondent had conceded the granting of the interdict it was
necessary for the applicant to file
at least eight replying
affidavits as well as some seventeen annexures. In my view it was of
no moment that respondent though conceding
the granting of the
interdict sought to deny Mrs Engelbrecht’s allegations about
him.
[29] In my view the applicant is
entitled to the costs of the application only up to date of the issue
of
rule nisi
on the 19
th
of October 2010.
[30] Accordingly, the
rule
nisi
that was issued on the 19
th
of
October 2010 is confirmed.
Respondent is ordered to pay
applicant’s costs up to and including the issue of the
rule
nisi
on the 19
th
of October 2010.
_____________
N G BESHE
JUDGE OF THE HIGH COURT
APPEARANCES
For
Applicant ADV: P W A Scott
Instructed
by SCHOEMAN OOSTHUIZEN INC.
167
Cape Road
PORT
ELIZABETH
Tel.:
(041) 373 6878
Ref.:
Mr. S Oosthuizen/cl/C01030
For
Respondent ADV: D Welgemoed
Instructed
by FRANCOIS LE ROUX ATTORNEYS
240
Church Road
Walmer
PORT
ELIZABETH
Tel.:
(041) 581 8710 / 082 572 5189
Ref.:
Francois Le Roux
Date
Heard 2 December 2010
Date
Reserved 2 December 2010
Date
Delivered 13 December 2011