Med 24-7 (Pty) Ltd v Kruger and Others (5872/2021) [2022] ZAFSHC 79 (19 April 2022)

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[2022] ZAFSHC 79
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Med 24-7 (Pty) Ltd v Kruger and Others (5872/2021) [2022] ZAFSHC 79 (19 April 2022)

IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Case
number: 5872/2021
In
the matter between:
MED
24/7 (PTY) LTD
APPLICANT
and
KRYSTAL
LYNNE
KRUGER
1
st
RESPONDENT
ROHAN
BENN
2
nd
RESPONDENT
TSHEPO
JUSTICE MOKETEMAFELA
3
rd
RESPONDENT
ROKANG
RAMOLULA
4
th
RESPONDENT
BRIAN
MOKHETHI
5
th
RESPONDENT
VR
MED (PTY)
LTD
6
th
RESPONDENT
CORAM:
NAIDOO, J
HEARD
ON:
10 FEBRUARY 2022
DELIVERED
ON:
19
April 2022
JUDGMENT
[1]
This matter started out as an urgent application but became opposed.
It was subsequently enrolled
and argued as an
opposed motion, and urgency was not being pursued. It is an
application to enforce the restraint of trade clause
contained in the
contracts of employment between the applicant and the first to fifth
respondents. Adv CD Pienaar appeared for the
applicant and Adv (Ms)
JF Mitchley for the first to fifth respondents. The 6
th
respondent did not participate in these proceedings. I shall refer to
the first to fifth respondents as “the respondents”, unless
it is
necessary to refer to them individually.
[2]
The applicant filed a Supplementary Affidavit, without obtaining the
consent of the respondents
or the leave of the court to do so. At the
start of proceedings in this application, the respondents objected,
and the applicant
withdrew the Supplementary Affidavit. The relief
claimed in the Notice of Motion was also amended by the applicant at
the start of
these proceedings. Consequently, the applicant sought
relief in the following terms:
2.1   The
first and second respondents be interdicted from engaging in any
other business, in competition with the applicant’s
business,
including the sixth respondent, be it direct or indirect, or as a
shareholder, partner, member of a close corporation,
director of a
company or in any other capacity, for a period of I (one) year from 1
September 2021 in the area known as Med 247 Area
which includes the
Bloemfontein area, and/or surrounding areas to a maximum distance of
100 (one hundred) kilometres radius from
the city centre.
2.2
In the alternative to the prayer in 2.1, that the third, fourth and
fifth respondents be interdicted for a period
of two years from the
date on which he/she ceases to be employed by the applicant, in any
area, from soliciting a customer or dealing
with a customer of the
applicant in respect of the business of an Ambulance and Paramedic
Service.
2.3
The first and second respondents be interdicted for a period of 2
(two) years from 1 September 2021 from soliciting
any employee of the
applicant or in any way entice an employee of the applicant to leave
the employment of the applicant, and/or
to accept employment with any
other firm, company or business.
2.4
The first to fifth respondents be interdicted from using and/or
divulging any confidential information belonging
to the applicant for
whatever reason.
2.5
The first to fifth respondents, and any other party opposing the
relief sought, be ordered to pay the costs
of this application. The
applicant sought, in the alternative to the above prayers, an order
that a
rule
nisi
be issued calling on the respondents
or any interested party to appear before the court and show cause why
the above orders should
not be granted. This was clearly foreshadowed
in the event that the matter was dealt with as an urgent application
and that interim
relief would be granted. The urgency fell away and
the matter was dealt with as an opposed motion. I shall not deal
further with
this aspect of relief sought.
[3]
By way of background, the first to fifth respondents are former
employees of the applicant, which is a
company that provides
ambulance and paramedic services in certain areas of South Africa,
namely, Bloemfontein, Kimberly, East London
and Rustenburg. The
applicant alleges that these areas are referred to as the Med 24/7
area. It further alleges that the first to
fifth respondents are
aware of this. The respondents each entered into a contract of
employment with the applicant, and each contract
contained a
restraint of trade clause. The restraint of trade clause in respect
of the first to third respondents is the same and
reads as follows:
“
28.1
The employee undertakes not to be engaged in any other business, in
competition with the employer’s business, be
it direct or indirect,
or as a shareholder, partner, member of a Close Corporation, director
of a company or in any other capacity,
within 1 (one) year of
termination of this agreement, in the area known as MED 247 AREA
and/or surrounding areas to a maximum distance
of 100 (one hundred)
kilometres radius from the city centre/s.
28.2
The employee further undertake that he/she shall not, for a period of
2 (two) years from the date on which
he/she ceases to be employed by
the employer, for any reason whatsoever, within the territory,
solicit an employee
of the company or in any way entice an
employee of the company to leave the employment of the employer,
and/or to accept employment
with any other firm, company or business.
28.3
The employee acknowledges and agrees that the aforesaid restraint is
fair, reasonable and necessary for the
protection of his/her
employer, his/her employer’s trade name and goodwill attached
thereto.
28.4
Without prejudice to any other rights which the employer may have in
law, the employee acknowledges that the
agreed damages due to his/her
employer will be an amount of R5000-00 (five thousand rand) in
respect of each calendar month during
which any breach of the
aforesaid restraint continues, and that the employer shall be
entitled to recover such amount, and any associated
recovery costs,
from the employee in respect of such breach.”
[4]
The restraint of trade clause in respect of the fourth and fifth
respondents reads as follows:
“
16.1
The EMPLOYEE agree that he/she shall not without the EMPLOYER’S
prior written consent, for a period of (I) one
year calculated from
the date on which he cease to be employed by the EMPLOYER, be engaged
in, whether directly or indirectly and
whether jointly or solely, or
as Director, Manager, Agent, Consultant or Sales Representative or in
any other capacity, any business
or concern which carries on the
business of an Ambulance and Paramedic Service, within the perimeters
of the territory;
16.2
The territory shall mean Rustenburg and Kimberly and surrounding
areas, to a maximum distance of 100km radius
from city centre/s;
16.3
For the purpose of this agreement, the term “cease to be employed”
shall mean the termination of the EMPLOYEE’S
contract of employment
with the employer, for any reason whatsoever;
16.4
The EMPLOYEE agree that he/she shall not, for a period of two years
from the date on which he/she cease to
be employed by the EMPLOYER,
for any reason whatsoever, in any area, solicit a customer or deal
with a customer of the EMPLOYER in
respect of the business of an
Ambulance and Paramedic Service.
16.5
for the purposes of the preceding paragraph, “Customer” shall
mean any company (
regardless of the area where it may be situated
)
or other corporate body, partnership, close corporation, individual
or other person:
16.5.1  who at
the date of termination of the EMPLOYEE’S employment is
indebted or
obliged to the EMPLOYER, or
16.5.2
with whom negotiations were taking place at that date, which
negotiations, if successful, would have resulted in
the Customer
becoming so indebted or obliged to the EMPLOYER, or
16.5.3  who at
any time during the period of six (6) months prior to the date
on which the
EMPLOYEE ceased to be employed by the    EMPLOYER was
so indebted or obligated to the EMPLOYER.
16.6
The EMPLOYEE further agrees that he/she shall not, for a period of
two years from the date on which he/she
cease to be employed by the
EMPLOYER, for any reason whatsoever, within the territory, solicit an
employee of the company or in any
way entice an employee of the
company to leave the employment of the EMPLOYER, and/or to accept
employment with any other firm, company
or business
.
16.7
The restraints contained in this undertaking are separate and
divisible and should any court of law deem any
portion of this clause
or this contract to be null and void, it will not affect any other
part thereof.
16.8
The EMPLOYEE acknowledge and agree that:
16.8.1  During
the course of his/her employment, both past and present, he/she have
acquired or will acquire a considerable amount
of expertise and
confidential information to the EMPLOYER’S methods of operation and
in particular with regard to manufacture,
marketing, selling and
pricing of services referred to in paragraph 16.1, as well as
confidential information relating to the EMPLOYER’S
customers and
their use and application of services referred to in par 16.1;
16.8.2  the
EMPLOYER have a proprietary interest in the above expertise
and confidential information;
16.8.3
such expertise and confidential information would be of invaluable
benefit to any of the EMPLOYER’S competitors
and the EMPLOYER will
suffer substantial prejudice if he/she were to breach any of the
above restraints after ceasing to be employed
by the EMPLOYER;
16.8.4
the restraints are the minimum restraints required by the EMPLOYER to
protect his proprietary interests and
accordingly the EMPLOYEE regard
the restraints as entirely reasonable;
16.8.5
in the event of the EMPLOYEE committing a breach of any of the above
restraints the EMPLOYER will be entitled
to bring legal proceedings
against the EMPLOYEE to remedy such breach, which proceedings may
include, but need not be limited to,
an interdict against the
EMPLOYEE and, or alternatively, a suit for the recovery of any such
damages as can be shown to have been
caused
to the EMPLOYER as a result of the breach by the EMPLOYEE;
16.8.6
in the event of the EMPLOYER having to bring legal proceedings
against the EMPLOYEE for reasons of the employees’
breach of any of
the above, the employee will be liable to pay the employer’s legal
fees on an attorney
client basis.”
[5]
It is common cause that the first and second respondents were
employed to work in the Kimberly area, and
that at some stage they
moved to Bloemfontein and continued to work for the applicant in what
the latter alleges to be senior positions.
The applicant alleges that
the first and second respondents requested to be moved to
Bloemfontein so that they could better manage
the business of the
applicant for the Northern Cape and the Free State. In so doing, they
dealt directly with the applicant’s clients
and connections. The
applicant also financed the training of the first and second
respondents, through which they gained knowledge
on how to operate an
ambulance service.
[6]
Whilst in the applicant’s employ, the first and second respondents
formed close relationships with the
clients and third parties with
whom the applicant conducted business, and they were also privy to
the applicant’s confidential
information, such as the applicant’s
methods of operation, pricing and costing and its client lists. They
also had access to confidential
documents, including Patient Report
Forms (PRF). The second respondent attended and passed a course
financed by the applicant. One
of the third parties that referred a
considerable amount of work to the applicant, was VR Security with
whom the first and second
respondents formed a close relationship.
[7]
During May 2021, the applicant noticed a downturn in the volume of
work, which would normally be referred
to the applicant by VR
Security and other third parties. This was discussed at a team
building event, which included the manager
of VR Security, during
June 202. It was agreed that all calls from VR Security would go
through the applicant’s call centre. In
spite of this, the second
respondent insisted that all calls be received on his private mobile
telephone. Although both the first
and second respondents were with
work telephones, they refused to use them.  Both the first and
second respondents resigned,
with immediate effect, from the employ
of the applicant on 1 September 2021.
[8]
In December 2021, the applicant learned that the first and second
respondents had taken up employment
with the sixth respondent, which
was registered on 3 September 2021, two days after the first and
second respondent had resigned
from its employ. The applicant further
alleges that the first and second respondents solicited and enticed
the third, fourth and
fifth respondents to resign from the employ of
the applicant and take up employment with the sixth respondent. The
fourth respondent
resigned without notice on 13 December 2021, whilst
the third and fifth respondents simply absconded from its employ
during November
2021. The applicant alleges that the third to fifth
respondents are also in breach of the restraint of trade clause in
their respective
employment contracts. The applicant concludes that
the conduct of the first and second respondents constitutes unlawful
competition
in that they are using the applicant’s confidential
information and the relationships they have
built with the
applicant’s trade connections to benefit themselves and the sixth
respondent. It is thus entitled to the relief it
seeks, as set out in
the Notice of Motion.
[9]
The respondents’ opposition to the application is based on a number
of grounds. They allege that the
applicant has misled the court with
regard to the harm it allegedly suffered. They deny soliciting any of
the applicant’s clients
or employees, and allege that the applicant
is inconsistent in enforcing the restraint of trade clause against
them, but not against
approximately twelve other former employees who
are now working for competitors of the applicant. In addition the
first and second
respondents allege that they were led to believe
that the Med 24/7 area referred to Kimberly and would not knowingly
have agreed
to a contractual term which prohibited them from working
in the Free State, Northern Cape, North West and Eastern Cape
Provinces.
It is also noteworthy that the restraint of trade clause
in the employment contracts of the fourth and fifth respondents
restricts
their ability to work within the perimeters of the
“territory”. Clause 16.2 defines ”territory”, as “
Rustenburg
and Kimberly and surrounding areas, to a maximum distance of 100km
radius from city centre/s”.
The respondents
allege further that it is unreasonable to enforce the restraint of
trade clause against the latter two respondents
as they were not
permanently employed by the applicant.
[10]   The
respondents allege further that the applicant has breached the
employment contract by failing to pay the respondents
for overtime
worked, by requiring them to work illegal and inhumanely long hours,
by failing, on occasion, to timeously pay their
salaries and, to use
the respondents’ words, “most alarmingly” the applicant made
deductions from the respondents’ salaries
in respect of Pay As You
Earn (PAYE) tax and in respect of the Unemployment Insurance Fund
(UIF) but did not pay these deductions
over to the South African
Revenue Service (SARS) and the Department of Labour respectively.
They also allege that a deduction was
made from their salaries in
respect of a training course, which they were never sent to
attend.      The
respondents also allege
that the applicant has failed to prove the existence of a protectable
interest or any actual harm suffered.
Therefore, it would be
unreasonable and against public policy to grant the relief that the
applicant seeks, as this would be an unjustifiable
infringement of
their constitutional rights.
[11]   The
issues for this court to decide are whether:
11.1  the
restraint of trade clause may be enforced against the respondents in
respect of the Bloemfontein area;
11.2  the
applicant has established the existence of a protectable interest, if
it is found that the restraint is applicable
in respect of
Bloemfontein;
11.3  the
respondents have harmed or prejudiced that interest;
11.4  the
applicant’s interest is of such a nature that it weighs
substantially against the interests of the respondents, and
justifies
an order enforcing the restraint of trade clause, preventing the
respondents from being economically active and denying
them the right
to earn a living.
[12]   As
a general rule, agreements in restraint of trade are generally
enforceable, unless they are unreasonable or unlawful
and against
public policy
. It must also
be borne in mind that courts should always give effect to contracts
entered into freely. That is an established principle
of our law of
contract. It creates certainty in the commercial world. However,
every person should, as far as possible, be able to
operate freely in
the commercial and professional world. The respondents in this matter
bear the onus of showing that the restraint
of trade clause is
unreasonable, unenforceable and/or contrary to public policy.
[13]
The case of
Magna Alloys and Research
(SA) (Pty) Ltd v Ellis 1984(4) SA 874 (A)
stated
the position in our law with regard to agreements in restraint of
trade, and the principles enunciated therein have been applied
in a
long line of cases in the thirty-eight years since that matter was
decided. The approach laid down by the court was succinctly
captured
in the Headnote as follows:
“
The
approach, followed in many South African judgments, that a covenant
in restraint of trade is
prima
facie
invalid
or unenforceable stems from English law and not our common law, which
contains no rule to that effect. The position in our
law is that each
agreement should be examined with regard to its own circumstances to
ascertain whether the enforcement of the agreement
would be contrary
to public policy, in which case it would be unenforceable. Although
public policy requires that agreements freely
entered into should be
honoured, it also requires, generally, that everyone should be free
to seek fulfilment in the business and
professional world. An
unreasonable restriction of a person's freedom of trade would
probably also be contrary to public policy,
should it be enforced.
Acceptance
of public policy as the criterion means that, when a party alleges
that he is not bound by a restrictive condition to which
he had
agreed, he bears the
onus
of proving that the
enforcement of the condition would be contrary to public policy. The
Court would have to have regard to
the circumstances obtaining at the
time when it is asked to enforce the restriction. In addition, the
Court would not be limited
to a finding in regard to the agreement as
a whole, but would be entitled to declare the agreement partially
enforceable or unenforceable.”
[14]
The principles set out in
Magna
Alloys
were
comprehensively re-stated by Stegman J in
Sibex
Engineering Services (Pty) Ltd v Van Wyk and Another
1991 (2) SA 482
(T)
at 502 J -
503 B as follows:
“
A
contractual restraint curtailing the freedom of a former employee to
do the work for which he is qualified will be held to
be
unreasonable, contrary to the public interest and therefore
unenforceable on grounds of public policy if the ex-employee (the
covenantor) proves that at the time enforcement is sought, the
restraint is directed solely to the restriction of fair competition
with the ex-employer (the covenantee); and that the restraint is not
at that time reasonably necessary for the legitimate protection
of
the covenantee's protectable proprietary interests, being his
goodwill in the form of trade connection, and his trade secrets.
If
it appears that such a protectable interest then exists and that the
restraint is in terms wider than is then reasonably necessary
for the
protection thereof, the Court may enforce any part of the restraint
that nevertheless appears to remain reasonably necessary
for that
purpose.”
[15]
With regard to protectable interests,
the
court in
Sibex
Engineering
at
502 D-E defined proprietary interests, in the context of a
protectable interest, thus:
“
The
proprietary interests that could be protected by such a restraint
were essentially of two kinds. The first kind consisted of the
relationships with customers, potential customers, suppliers and
others that go to make up what is
compendiously
referred to as the "trade connection" of the business,
being an important aspect of its incorporeal property
known as
goodwill. The second kind consisted of all confidential matter
which is useful for the carrying on of the business
and which could
therefore be used by a competitor, if disclosed to him,
to
gain a relative competitive advantage. Such confidential material is
sometimes compendiously referred to as "trade secrets".”
[See also
Experian
v Haynes and Another 2013(1) SA 135 (GSJ) at para 17
].
[16]
With regard to goodwill and protectable interests, Nestadt JA
in
Rawlins and Another v Caravantruck (Pty) Ltd
[1992] ZASCA 204
;
1993 (1) SA 537
(A), at 541 C-H
remarked that:
“
The
need of an employer to protect his trade connections arises where the
employee has access to customers and is in a position to
build up a
particular relationship with the customers so that when he leaves
the employer's service he could easily induce the
customers to
follow him to a new business (Joubert
General
Principles of the Law of Contract
at
149). Heydon
The
Restraint of Trade Doctrine
(1971)
at 108, quoting an American case, says that the 'customer contact'
doctrine depends on the notion that
'the
employee, by contact with the customer, gets the customer so strongly
attached to him that when the employee quits and joins
a rival he
automatically carries the customer with him in his pocket'.
In
Morris
(Herbert) Ltd v Saxelby
[1916]
1 AC 688
(HL) at 709 it was said that the relationship must be such
that the employee acquires
'such
personal knowledge of and influence over the customers of his
employer . . . as would enable him (the servant or apprentice),
if
competition were allowed, to take advantage of his employer's trade
connection . . .'.…
Whether
the criteria referred to are satisfied is essentially a question of
fact in each case, and in many, one of degree. Much will
depend on
the duties of the employee; his personality; the frequency and
duration of contact
between
him and the customers; where such contact takes place; what knowledge
he gains of their requirements and business; the general
nature of
their relationship (including whether an attachment is formed between
them, the extent to which customers rely on
the employee and how
personal their association is);
how
competitive the rival businesses are; in the case of a salesman, the
type of product being sold; and whether there is evidence
that
customers were lost after the employee left…”
[see
also Walter McNaughtan (Pty) Ltd v Schwartz and Others 2004(3) SA 381
(C)]
[17]
In the present matter, the respondents acknowledge that they
voluntarily entered into the employment contracts containing
the
restraint of trade clause.  Apart from asserting that the
restraint of trade clause in their respective contracts cannot
be
enforced against them in respect of the Bloemfontein area, they
contend that due to circumstances that arose during the period
of
their employment by the applicant, and which prevailed at the time of
their respective resignations, it would be unfair and
unconstitutional
for the restraint of trade clause to be enforced
against each of them. Their right to practice their trade and earn a
living would
be negatively impacted as it would severely prejudice
their freedom to be gainfully employed. I will deal with the
restraint of trade
clauses in their respective contracts.
[18]
The contracts of the first and second respondents are the same, and
bear the name “SEESA” at the top of the first
page of the
contract, a company which apparently provides “Professional Legal
Support for Business”. Their place of work in clause
in 5 is listed
as “Kimberley” and in clause 28, the area to which the restraint
of trade applies is “Med 247 Area”. The respondents
allege that a
person called “Charl”, who was the applicant’s employment
representative, explained to them that the Med 247
area referred to
Kimberley, and that they would not be allowed to work for a
competitor in Kimberley. They did not agree or envisage
that they
would not be able to work outside the area of Kimberley. “Med 247
Area” is not defined in the contract. The applicant
alleges that
the respondents are aware of its areas of operation and that they
ought to know that if they were working in Bloemfontein,
that area
would be included in the restraint.
[19]
The first respondent was employed as an Emergency Care Technician,
while the second respondent was employed as a
Basic Life Support
practitioner. They contend that they were asked by the applicant to
assist with operations in Bloemfontein, as
a result of the
resignations of employees in Bloemfontein, and that Kimberley was
their place of employment. They did not perform
management functions.
The applicant did not deny that Charl was its employment
representative or that he advised the first and second
respondent
that the restraint applied only to Kimberley and surrounding areas,
to a maximum radius of 100 km from the city centre.
The first and
second respondents also explained that each base from which the
applicant operates has an individual operating licence
from the
Department of Health, hence they were not aware that the Med 247 area
referred to any other area than Kimberley. The latter
was specified
as their base and it was always the intention that the restraint
would apply to their actual base. I will return to
this aspect later.
[20]
The third respondent’s employment contract also emanates from
SEESA, and records his place of employment as Bloemfontein.
The
restraint of trade clause relates to Bloemfontein. This is contrary
to the applicant’s allegation that the third respondent’s
contract contains the same restraint of trade clause as that of the
first and second respondents. He was also employed as a Basic
Life
Support practitioner. The respondents all contend that the
applicant’s conduct made their continued service to the applicant
untenable and that they had no option but to resign. I have set out,
earlier in this judgment, their contentions relating to the
applicant’s treatment of them.
[21]
The fourth and fifth respondents’ contracts are different from that
of the other respondents, and does not appear
to emanate from SEESA.
The fourth respondent was employed as a Basic Ambulance Assistant for
a fixed period of three months from
5 June 2021 to 5 September 2021,
while the fifth respondent was employed as a Basic Life Support
practitioner for a fixed period
of four months from 15 January 2021
to 15 May 2021. Their contracts specifically provide that the
contract will terminate automatically
on the end date, without
notice. There is no indication that new contracts were entered into
after those termination dates, although
it appears that they
continued to work for the applicant at least until November or
December 2021. As I indicated, the applicant
alleges that the fourth
respondent resigned on 13 December 2021 while the fifth respondent
absconded in November 2021. The respondents
deny this and indicate
that the fifth respondent was on sick leave during November 2021 and
produced a medical certificate to this
effect.
[22]
The restraint of trade clause relevant to the fourth and fifth
respondents, which I have set out earlier, specifically
prohibits
them from working in Rustenburg and Kimberley after termination of
their employment with the applicant. These areas are
defined as the
“
territory” referred to in the contract.
Rustenburg and Kimberley are more than 100 kilometres from
Bloemfontein. The respondents
contend that the fourth and fifth
respondents are therefore not prohibited from working in
Bloemfontein. Moreover, they were not
permanently
employed by the applicant, rendering the enforcement of the restraint
of trade clause against them, unreasonable, unfair
and
unconstitutional.
[23]
The applicant’s response to this lies in the amended relief
it seeks against the third, fourth and fifth respondents,
namely that
“
they be interdicted for a period of two years from date on
which he/she ceased to be employed by the Applicant, in any area,
from
soliciting a customer or deal with a customer of the Applicant
in respect of the business of an Ambulance and Paramedic Service”
,
on the basis that the words “
or any other place”
in the
third respondent’s contract are sufficient to grant the relief it
seeks against these respondents. I remark that no evidence
whatsoever
has been placed before this court to show that the third, fourth and
fifth respondents were in any way responsible for
soliciting or
dealing with customers of the applicant.
The
applicant, in fact, alleged that it was the first and second
respondent who attempted to sabotage its business by soliciting and
enticing the third to fifth respondents to leave the employ of the
applicant and seek employment with the sixth respondent.
[24]
With regard to the contention that the applicant, is entitled to the
relief it claims against the third to fifth
respondents by virtue of
the words referred to above, I point out that clause 5.2 of the third
respondent’s contract refers to
the place of work entitling the
applicant to deploy the third respondent to any other place(s), than
Bloemfontein. The restraint
of trade clause 28.2, as set out in
paragraph [3] above, restrains the third respondent from soliciting
any employee of the applicant,
within the territory, to leave the
employ of the applicant. The word “territory” is not defined in
the third respondent’s contract.
In the contracts of the fourth and
fifth respondents, there is no clause relating to place of work or
deployment to “any other
place”. The restraint of trade clause
16, set out in para [4] above defines territory as Rustenburg and
Kimberley and surrounding
areas within a radius of 100 kilometres
from the city centre/s. Clause 16.4 prohibits these two respondents
from soliciting or dealing
with a customer of the applicant, “
in
any area”.
Clause 16.6 contains a prohibition against
soliciting any employee of the applicant to leave its employ.
[25]
The relief claimed by the applicant in prayer 3 of the Notice of
Motion has no foundation in the contract of the
third respondent. As
I indicated, the territory is not defined and he is prohibited from
soliciting an employee of the applicant,
and not a customer. The
fourth and fifth respondents are not restrained from working in
Bloemfontein. They are operational employees
on a lower level, who
clearly do not deal or interact with customers of the applicant to
the extent that they would be able to solicit
or entice the
applicant’s customers
away from the applicant. They would interact
almost exclusively with
the patients that require to be transported to a medical facility. No
evidence of their interaction with
the applicant’s customers or
ability to influence them, or of them actually doing so, has been
placed before this court. If the
applicant relies on the words “in
any area” in respect of the fourth and fifth respondents, this
would imply that the prohibition
would apply to any area in South
Africa where the applicant has customers.
[26]
This would place the fourth and fifth respondents in a position that
their ability to find employment and earn an
income would be unduly
and unreasonably be fettered for a period of two years. The applicant
has, in my view, not shown that it has
a protectable interest for
such broad relief to be granted against the fourth and fifth
respondents. Similarly, the relief claimed
against the third
respondent, which is not based on the contract between him and the
applicant, would be unreasonable, and even unlawful.
The respondents
raise the fact that at least twelve former employees of the
applicant, who also signed restraint of trade agreements
with the
applicant, have left its employ and are now employed by competitors
of the applicant. The latter has not sought to enforce
such restraint
of trade agreements against those employees. The applicant’s
response to this allegation by the respondents is not
a denial
thereof, but the stance that those were operational employees. In my
view, exactly the same consideration would apply to
the third to
fifth respondents, who are operational employees. The applicant’s
bid to enforce the restraint of trade agreements
against them is, in
my view, arbitrary, unreasonable, unfair and not in keeping with
public policy.
[27]
It appears, therefore, that the applicant’s main complaint is
against the first and second respondents. I will
accordingly deal
with the case
against
them. As a starting point, I am alive to the fact that in an opposed
motion, the Plascon-Evans Rule applies. In the matter
of
Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984(3) SA
623 (A), court held at p 634 H that “
where
in proceedings on notice of motion disputes of fact have arisen on
the affidavits, a final order, whether it be an interdict
or some
other form of relief, may be granted if those facts averred in the
applicant's affidavits which have been admitted by the
respondent,
together with the facts alleged by the respondent, justify such
an order”.
This
has become known as the Plascon-Evans Rule. In this matter, the first
and second Respondents have raised a dispute of fact with
regard to
the interpretation of the term “Med 247 Area”.
[28]
Not every dispute of fact raised by a respondent is necessarily a
genuine or
bona fide
dispute and the court has to examine such
dispute in the light of the circumstances of the matter to make a
determination in this
regard. I have set out what the contentions of
the parties are in respect of the relevant interpretation. “Med 247
Area” is not
defined in the employment contract, and it is common
cause that the first and second respondents were employed in
Kimberley. The
applicant alleges that they requested to be
transferred to Bloemfontein and as such, they knew that this fell
within the Med 247
Area. The restraint of trade clause would apply to
them in Bloemfontein. The first and second respondents deny this and
tender the
explanation that the applicant experiences a high turnover
of staff. The successive resignations of senior staff caused the
applicant
to request the first and second respondents to move to
Bloemfontein to assist in the running of that base.
[29]
As I indicated, the respondent does not deny that Charl advised the
first and second respondents that the Med 247
Area refers to
Kimberley. The court would therefore have to accept the respondent’s
version regarding their understanding of the
parameters of the Med
247 Area, and that it did not include Bloemfontein. On this aspect
alone, the application stands to be dismissed,
as the applicant has
failed to show that it is entitled to enforce the restraint of trade
agreement against the first and second
respondents. There is a
material dispute of fact which the applicant was aware of before this
application was launched. This dispute
of fact cannot be resolved on
the papers.  However, it will be useful to examine whether the
applicant has demonstrated that
it has a protectable interest which
is being harmed or is likely to be harmed by the first and second
respondents.
[30]
The applicant alleges that
when the first and second respondents moved to Bloemfontein, the
first respondent stepped into a managerial
position. The first
respondent in Answer, explains that she was appointed as an
operations medic in Kimberley but due to a lack of
management at that
base she was asked to step in and prevent the “looming disaster”.
Thereafter due to the resignations/transfers
of managers in
Bloemfontein, she was asked to assist in operations management in
Bloemfontein. The first respondent avers that he
was appointed as a
basic life support medic in Kimberley and due to staff shortages in
Bloemfontein, he was asked to assist there
too. He was not employed
as a manager at any time.
[31]
Neither the applicant nor the first respondent set out exactly what
the duties of the first respondent were in Bloemfontein.
This
information is gleaned from averments that each makes in Founding,
Answer and Reply. It appears that the first respondent was
responsible for allocating shifts to the various employees and
thereafter submitting information regarding shifts/hours worked by
the employees to the applicant’s head office for payment to the
respective employees. It also appears that the first respondent
was
responsible for ordering oxygen from the service provider. There is
an indication in the papers that the applicant at times did
not pay
for the oxygen. The service provider withheld the oxygen tanks,
making it impossible for the employees such as the respondents
to do
their work. The applicant also alleged in Reply that the first
respondent, assisted by his father, was responsible for processing
salary payments to the employees.
[32]
The applicant makes a bald allegation that since the resignation of
the first and second respondents, it noticed
a downturn in the volume
of its work, of approximately 60%. No details are provided as to how
this figure was calculated, nor which
of its clients were no longer
servicing it. The applicant merely asserts that the first and second
respondents were sabotaging its
business and cited the resignations
of the third to fifth respondents a few months after the first and
second respondent as an example,
especially as they were all employed
by the sixth respondent around the same time in December 2021. The
respondents answer to this
is that it became untenable to continue in
their employment with the applicant  for the reasons I
enumerated above in para [10],
and which caused severe prejudice to
the respondents. The applicant clearly does not deny this in Reply,
but startlingly alleges
that he requested his accountant to attend to
the matter of the unpaid PAYE and UIF deductions.
[33]
With regard to soliciting its clients /customers, the applicant sets
out two scenarios from which it earns its income.
The one is what is
referred to as “self-sourced”, being referrals from towing
companies, security companies and hospitals. The
other category is
“administrative incidents”, which involves contracts with service
providers. With regard to the former, the
respondents set out in
detail that the applicant does not enjoy exclusive clients because of
the manner in which that work is obtained.
They describe a
“Whats-app” group of over 200 different role-players such as
police and towing companies who post news of accidents
on this group.
Ambulance service providers and paramedics, such as the respondents,
are also members of this group. So whichever
ambulance service
responds first to the accident scene, gets the client.
[34]
One of the towing companies referred to by the parties is Cobra
Towing. The respondents explain that this is a company
under whose
auspices several independent contractors, driving trucks, operate.
They are not employees of Cobra Towing. There are
five such
independent contractors, who each have their own contact persons to
whom referrals are made. The second respondent is a
friend to one of
these contractors, who refers work to the second respondent,
irrespective of which company he works for. Therefore,
the
respondents claim that the applicant is falsely alleging that they
are soliciting or enticing away the customers of the applicant.
The
respondents also allege that there is no contractual relationship
between towing companies and any ambulance service. They are
not even
obliged to make such referrals and they do not pay paramedics. The
applicant does not grapple meaningfully with this allegation,
save to
simply deny it, and allege that the respondents were previously
employed in Grahamstown and were unlikely to have any professional
dealings with role-players in Bloemfontein. It seems that the
applicant does not deny the manner in which self-sourced referrals
are made
[35]
The applicant also alleged that VR Security was one of its clients,
but no longer refers any work to it. The sixth
respondent is a
subsidiary of VR Security. The respondents undertook a detailed
explanation in their Answering Affidavit in this
regard. They admit
that VR Security was a client of the applicant, but the applicant
began refusing to despatch its paramedics (respondents)
for the
referrals made by VR Security unless the patients paid up-front. This
was often impossible as VR Security serviced approximately
eight
thousand clients, the large majority of whom were low-income earners
who had no medical aid cover or sufficient funds to pay
cash. This
resulted in VR Security forming its own company in the form of VR
Med, the sixth respondent, to service indigent members
of the public.
This is what caused VR Security to stop referring incidents to the
applicant. The respondents had no part in the establishment
of the
sixth respondent. The applicant did not deny this or even tender any
explanation in this regard.
[36]
The respondents further allege that the sixth respondent does not
handle administrative incidents which involve contracts
with service
providers. Payments received in respect of these contracts emanate
either from medical aid companies or the Road Accident
Fund. The
applicant also does not deny this, but instead speculates that the
sixth respondent is not a non-profit organisation, and
must operate
for profit. Therefore, it is likely to engage with the applicant’s
customers. In a similar vein, the respondents point
out that
ambulance service providers do not enjoy any exclusivity with regard
to referrals from hospitals. The latter refer cases
to any ambulance
service which is presumably available. With regard to a hospital
called Busamed, the respondents explain that the
sixth respondent
does have a contract with the hospital for the transportation of
indigent patients, free of charge, to government
hospitals. In
return, the hospital sterilises the sixth respondent’s linen and
equipment at no cost. The applicant has its own
contract for
sterilisation of its equipment and linen but refuses to transport
indigent patients. Therefore, the contract that the
sixth respondent
has, causes no financial prejudice to the applicant. The applicant
did not deny or respond to this allegation.
[37]
There are many other instances which the applicant raised in its
Founding papers regarding the relationship between
the first and
second respondents and the customers of the applicant, each of which
have been countered by the respondents, but which
were not dealt with
in Reply by the applicant. I do not deem it necessary to traverse
each and every one of these aspects, and have
highlighted what I
consider to be the most important. It is not disputed that the first
and second respondents have been paramedics
for over ten years and
have accumulated a fair amount of experience in that time. The manner
in which ambulance and paramedics services
operate (at least in
Bloemfontein) and the nature of the work, as detailed by the
respondents, is not seriously in dispute. The courses
which the
applicant alleges it sent the respondents on, at its cost, turns out
not to be the case. The respondents allege that such
amounts were
deducted from their salaries but they were never sent on those
courses.
[38]
On a conspectus of all the facts and evidence before this court, it
is clear that several disputes of fact have arisen,
the most
important one being the interpretation of the term “Med 247 Area”.
This is a material dispute of fact which is relevant
to a
determination of whether the restraint of trade clause is enforceable
against the first and second respondents in Bloemfontein.
It would no
doubt, require oral evidence to be led, especially that of Charl. The
other disputes which I have outlined above go to
the determination of
whether the applicant has a protectable interest and whether the
conduct of the respondents has harmed or will
harm that interest.
[39]
There is no evidence that the first respondent dealt with or built up
a relationship with the customers of the applicant
to the extent that
she is now in a position to take those customers with her to the new
employer. At best, she appears to have assisted
with operational and
administrative matters. There is nothing to indicate that she had
access to confidential information such as
costing, pricing and the
like, and whether her knowledge of such information has or will
seriously harm the applicant’s business.
There is likewise nothing
to indicate whether the applicant did in fact have a client list to
which the first respondent had access
and therefore, the means to use
it to the prejudice of the applicant. The first respondent indicated
that all such information is
dealt with by the applicant’ head
office and that she did not have access to such information.
[40]
With regard to the second respondent it has not been disputed that he
did not occupy any managerial position and
did not have access to the
applicant’s confidential or financial information. He was a basic
life support practitioner who worked
in the field transporting
patients in need of care. He sets out the manner in which ambulance
service providers work in Bloemfontein,
which is not in dispute, and
which indicates that he has not, by his conduct jeopardised the
applicant’s business. The applicant
would surely have suffered the
inconvenience of losing five employees in a short space of time, but
the circumstances leading to
their resignations can be attributed
directly to the applicant’s treatment of them, its non-compliance
with its statutory obligations
towards the respondents, as well as
its own conduct regarding referrals, particularly in the case of VR
Security. It is clear that
the applicant did not hold up its end of
the obligations created in terms of the employment contracts. This
would entitle the respondents
to raise the defence of
exceptio non
adempleti contractus
[exception of unfulfilled contract;
exception on the ground that the plaintiff, too, is in default (and
therefore cannot demand
performance)] against the applicant’s
attempts to enforce the restraint of trade.
[See
in this
regard
Bk Tooling (Edms) Bpk v Scope Precision Engineering (Edms) Bpk
1979(1) SA 391 (A)
and the
Labour Court decision in
Megafreight
Services (Pty) Ltd v Bezuidenhout & Another (J1591/19) [2019]
ZALCJHB 218 (28 August 2019)
accessible
on SAFLII, where the court considered the principles in
BK
Tooling.
].
[41]
In my view, therefore, the dispute regarding the interpretation of”
Med 247 Area” cannot be resolved on the papers.
I am not satisfied
that the applicant has established that it has an interest deserving
of protection by this court or that the respondents
have caused harm
or are likely to cause harm to its interest. The enforcement of the
restraint of trade clause in the employment
contracts in respect of
the first to third respondents would be unreasonable, unfair and
against public policy, as it would unduly
interfere with the right of
these respondents to practice their trade and earn a living. I have
already found that in respect of
the fourth and fifth respondents,
the applicant is not entitled to enforce the restraint, and its
attempt to extend the application
of clause 16.1 and 16.2 through the
provisions of 16.4 is impermissible and would also unreasonably and
unjustifiably interfere with
the rights of the fourth and fifth
respondents to practise their trade and to be economically active.
[42]
In the circumstances, the following order is made:
The
application is dismissed with costs.
S NAIDOO J
On
behalf of the Applicant:
Adv CD Pienaar
Instructed
by:
Kramer Weihmann Inc
24
Barnes Street
Westdene
Bloemfontein
(Ref:
J Nortje/NO5884/cdp)
On
behalf of the 1
st
-5
th
Respondent:
Adv JF Mitchley
Instructed
by:

Lovius Block Inc
31
First Avenue
Westdene
Bloemfontein
(Ref:
LM2640*S431/21-D.H.M./dn))