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[2022] ZAKZPHC 2
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SD Noorgat Trading Enterprise CC t/a Powertrade Cash and Carry (Focus Group) v Mahomed (1179/21P) [2022] ZAKZPHC 2 (28 January 2022)
IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
CASE
NO: 1179/21P
In the matter between:
S D NOORGAT TRADING ENTERPRISE
CC
APPLICANT
T/A POWERTRADE CASH AND CARRY
(FOCUS GROUP)
and
IRFAAN DEEN
MAHOMED
RESPONDENT
ORDER
The
following order is granted:
1.
The
application is dismissed with costs, such costs to include the costs
consequent upon the employment of two counsel.
2.
The
applicant is directed to pay the costs consequent upon the hearing of
10 June 2021, as well as the costs incurred by the respondent
as a
result of the applicant’s opposition to the respondent’s
application for condonation, such costs to include the
costs
consequent upon the employment of two counsel.
JUDGMENT
BEZUIDENHOUT
AJ
Introduction
[1]
The
applicant, SD Noorgat Trading Enterprise CC trading as Powertrade
Cash and Carry (Focus Group), is seeking far reaching final
interdictory relief against the respondent, Mr Irfaan Deen Mahomed,
who was previously employed by the applicant as a senior buyer,
and
who the applicant claims is in possession of its confidential or
sensitive information.
[2]
The
respondent informed the applicant on 4 February 2020 that he intended
to resign from the applicant’s employment with effect
from 29
February 2020.
[3]
On
23 February 2021, the applicant instituted the current application
against the respondent, seeking the following relief in the
form of a
rule
nisi
:
‘
1.1
The respondent is interdicted and restrained forthwith from utilising
or disclosing in any way
to any third party the confidential
information of the applicant and in particular the confidential
information relating to the
applicant’s:
1.1.1
suppliers
and business associates;
1.1.2
marketing
strategies;
1.1.3
contractual
arrangements between the applicant, its suppliers and business
associates;
1.1.4
financial
details including credit and discount terms relating to the
applicant’s suppliers;
1.1.5
the
details of prospective and existing customers;
1.2
The
respondent be interdicted and restrained from soliciting business
from the applicant’s suppliers and from engaging himself
or
through any third party the confidential information he received
whilst employed by the applicant in relation to the applicant’s
business;
1.3
The
respondent is interdicted directly or indirectly or for the benefit
of any other person or entity from approaching associates
including
suppliers of the applicant and holding out to be still in the employ
of the applicant;
1.4
The
respondent is ordered to deliver to the applicant all and any hard
copy documents and the hard drive in his possession relating
to the
copied documents of the applicant’s business referred to in
paragraph 16 of the founding affidavit [which I may add,
contains a
vague reference to certain information such as the product item, cost
price of the item, where the item sells best,
the discount granted by
the supplier etc];
1.5
The
respondent is ordered to delete from any electronic medium, including
any computer, hard drive, flash drive, cloud storage and
any other
medium of any nature whatsoever the specific details downloaded by
him from his computer and referred to in the founding
affidavit or
any part thereof;
1.6
The
respondent is directed to bear the costs of the application, such
costs consequent upon the employment of two counsel.’
[4]
The
respondent opposed the application and filed an answering affidavit
whereafter the applicant filed its replying affidavit. As
a result of
new facts being raised in the replying affidavit, the respondent was
granted leave by Van Zyl J on 10 June 2021 to
file a supplementary
affidavit by 15 August 2021 in response to the applicant’s
replying affidavit, which he did, albeit
out of time. The respondent
filed an application for condonation for the late filing of the
supplementary affidavit, which was
opposed by the applicant. At the
commencement of the hearing of the matter before me, I indicated to
applicant’s counsel
that I was inclined to grant condonation
and would prefer not to waste time on the argument of the condonation
application. The
applicant’s counsel elected not to pursue the
opposition of the condonation application and instead chose to
proceed with
argument on the main application.
Background
[5]
It
is common cause that the respondent was employed by the applicant for
a period of approximately 18 years at the time when he
resigned in
February 2020. As mentioned above, he was employed as a senior buyer
at the time. The parties did not enter into an
employment contract at
any stage. The applicant conducts business by
inter
alia
providing
health and beauty services by selling haircare and healthcare
products, toiletries and household goods at eight stores
within
KwaZulu-Natal.
[6]
Before
his resignation, the respondent was responsible for securing goods
and commodities from various suppliers for placement in
the
applicant’s stores.
[7]
It
is the applicant’s case that the respondent, during his
employment,
inter
alia
gained
intimate knowledge of the identity of its various suppliers,
knowledge regarding the costing of goods supplied, and awareness
and
personal knowledge of which products sold at which localities
depending on the customer basis at such localities. Over time,
the
applicant conducted a comprehensive analysis of all products and
particularly which products did well at which stores, which
resulted
in generating more profits and reducing losses. Discounts were
furthermore obtained from the applicant’s suppliers
in relation
to substantial purchases of only certain products using these
so-called tried and tested methods of the applicant to
ensure that
these particular products would sell well.
[8]
The
applicant also alleges that this information which the respondent now
possessed is critical and any new or existing enterprise
would
benefit greatly from the information ‘in that it would not
require to purchase a range of products within a particular
line
given the already tried and tested method used by the applicant’.
[9]
The
respondent, on the other hand, alleges that the applicant uses
methods applied by other similar stores such as Dischem and Clicks,
and that there is nothing exclusive about the methods or processes
used by the applicant. The respondent’s current employer,
the
Save Group, where he commenced working at in March 2020, has over
time formulated its own models of how to place products in
particular
stores for particular markets, based on its own research and analysis
of its sales.
[10]
Although
disputed by the applicant, it is clear from the evidence before me
that the respondent resigned from the applicant’s
employment on
4 February 2020, and subsequently indicated in an email dated 5
February 2020 that his resignation will be effective
from 29 February
2020. It is common cause that the respondent had been provided with a
laptop by the applicant, which he utilised
up until it was returned
to the applicant around 17 February 2020.
[11]
On
the applicant’s version, it became aware shortly after the
laptop was returned to it, that the respondent had saved all
the data
and information relating to the applicant’s business on an
external hard drive and also emailed such data to his
personal email
account. The information and data had then been deleted from the
laptop prior to its return to the applicant.
[12]
The
applicant also became aware that the respondent had contacted one of
its service providers, a company referred to as 4Most.
In its
founding affidavit, it is alleged very specifically that the
respondent contacted 4Most under false pretences, ‘requesting
their assistance in uploading data from an Excel spreadsheet, into
the SAP business 1 system’. The respondent apparently
specifically requested 10 000 items to be uploaded. The applicant
alleges that this information would include
inter
alia,
the
product item, its cost price, the locality where the item sells best,
the discount granted by the supplier in respect of bulk
purchases,
and the products in particular ranges which sell well.
[13]
Although
it is common cause that the respondent commenced working for the Save
Group, it is the applicant’s case that the
Save Group was in
the process of expanding their health and beauty section, and that
the information retained by the respondent
‘
would
be of critical importance to his new employer as it will allow them
to easily identify those commodities that they should
focus on
without having to undergo the exercise the applicant had undertaken
for the past 20 odd years’. The applicant anticipated
a
substantial loss in revenue. The applicant provided no further
information as to where the Save Group’s stores are located
in
relation to its own stores, in respect of which the retained
information would have been utilized. The Save Group has furthermore
not been joined to these proceedings.
[14]
The
respondent denies that he contacted 4Most under false pretences. The
respondent attached the actual email sent by him to 4Most
on 7
February 2020, from which it appears that he requested a quote ‘on
only the Master Data Import function for now’.
He also informs
4Most that he has around 10 000 line items that he requires to be
imported and sets out a list of criteria. He
used the applicant’s
company information and contact details together with his own name.
The respondent was still in the
applicant’s employ but was on
leave, and continued to respond to emails and assisted some of the
other employees.
[15]
The
respondent explains at length that he had previously, during or about
2016, been requested by the applicant to import in excess
of 10 000
items or products onto the applicant’s SAP software in order to
generate a master data file which would be used
as an electronic
automated catalogue of the products kept in stock by the applicant.
The applicant was not happy with the costs
a service provider would
charge and requested the respondent to do it manually, which he did
in his personal time over a period
of three weeks. The applicant
apparently agreed to remunerate the respondent for this work done.
[16]
At
the time of the respondent’s resignation, the applicant had not
paid the respondent for this work done, and according to
the
respondent, that was the purpose of requesting the quotation from
4Most. The quotation would be forwarded to the applicant
‘to
prove the amount owed to me for this work based on what the service
provider would have charged for doing the same work’.
[17]
It
is the respondent’s version that Mr MFS Noorgat, the deponent
to the applicant’s founding affidavit, contacted him
telephonically after his resignation to discuss his alleged claims
against the applicant. During this conversation, Mr Noorgat
accused
him of using the company email without permission and of ‘taking
company information’. The respondent explained
to him why he
had emailed 4Most and why he retained the information.
[18]
The
respondent also sent an email to the applicant on 10 March 2020,
which came about after Mr Noorgat contacted the respondent’s
employer, and during which conversation he defamed the respondent and
tried to persuade his new employer not to keep him on. In
the email,
the respondent confirms that he was asked by the applicant to import
all 10 000 items onto SAP so as to allow SAP to
create the master
data file, that he completed the task after normal working hours ‘due
to its urgency’ and that the
quotation requested from 4Most was
to enable him to provide a quantification of the work done by him in
Rand value. The email was
not referred to in or attached to the
applicant’s founding affidavit.
[19]
The
applicant’s attorney of record forwarded a five page letter
dated 26 March 2020 to the respondent. The letter referred
to the
company laptop, which had been provided to the respondent to work
from and reference was made to ‘all data that was
copied off
the company server and stored on this laptop’. Reference was
made to the respondent’s alleged failure to
replace stock
timeously and accurately, and in most cases not at all. It was also
alleged that as a result, the applicant’s
business has suffered
a huge financial loss.
[20]
The
respondent was furthermore accused that he ‘deliberately and
maliciously set about sabotaging’ the applicant’s
business. Also, that he made misrepresentations to suppliers in order
to cause harm to the applicant’s business and that
he
deliberately reduced quantities that were required for the conduct of
applicant’s business.
[21]
It
was further noted in the letter that as an employee, the respondent
had regularly downloaded information from the applicant’s
server and saved it on the company laptop, and that it consisted of
complete lists of items and sales information, current and
historical. It was also noted that after being requested to return
the laptop, the respondent saved all the data on an external
hard
drive and emailed such data to his personal account.
[22]
The
respondent was referred to the email that he had sent to the
applicant’s service provider on 7 February 2020. In contrast
to
what the actual email says, the respondent was accused of ‘requiring
their assistance in uploading data from an excel
spreadsheet’.
The respondent was warned that the use of company data was a criminal
offence and that his actions in downloading
the data could result in
financial loss and harm to the applicant.
[23]
The
applicant’s attorney also issued a list of demands, and failing
compliance with, it would proceed to the high court, interdicting
the
respondent from using the stolen data at the business of his present
employer and requesting the return of the data.
[24]
The
respondent sent a reply to the applicant’s attorney’s
letter in an email dated 23 April 2020. He indicated that
he first
received the letter dated 26 March 2020 via email on 21 April 2020
and that due to the national lockdown, he was unable
to obtain legal
advice to respond more fully to the letter.
[25]
The
respondent expressed his concern at certain aspects of the letter and
stated that he was responding to the letter to avoid being
drawn into
unwarranted and unnecessary litigation. He informed the applicant’s
attorney that he had ‘certain potential
claims’ arising
from his previous employment with the applicant which he would
consider more closely once he had obtained
legal advice. He remarked
that ‘it is apparent that your client’s allegations in
your letter are aimed at dissuading
and hamstringing’ him from
pursuing
such claims.
[26]
The
respondent also stated that the content of the letter was based on
incorrect facts, and that events such as his resignation,
were
discussed between himself and the applicant from1 February 2020 up to
10 March 2020, which had not been referred to in the
letter. He also
wrote the following:
‘
I
categorically deny the allegations contained in your letter and
specifically deny that I acted fraudulently or unlawfully in any
way
whatsoever, neither have I caused your client any financial loss
prior to or subsequent to my resignation. This will be borne
out by
the fact that your client asked me to return to its employ during
February 2020….
I
have not made unlawful use of any of your client’s confidential
data or other business information to the benefit of myself,
my
current employer or any other party. As I have stated above the work
laptop has been returned to your client.
The
only information I have retained relates to proving any claim I may
have in law against your client which I will take advice
on in due
course as I am entitled to. With the greatest of respect to your
client, my present employer is a well established wholesale
and
retail supermarket chain with hundreds if not thousands of product
lines which do not even fall into the category of products
which your
client provides.
I
digress to mention that your client has contacted my present
employer, messaged and called me threateningly and made defamatory
statements about me to my present employer.’
[27]
The respondent concluded his
email by saying that he did not want to engage in unnecessary and
costly litigation and offered to
discuss any further issues at a
meeting which could be arranged after the lockdown was lifted. The
applicant did not attach or
refer to this email by the respondent in
its founding affidavit.
[28]
No further steps were taken by
the applicant after the respondent sent his email of 23 April 2020.
Mr Noorgat however instituted
an action out of the Pietermaritzburg
Regional Court against the respondent for repayment of monies in
respect of a loan advanced
to the respondent. It was pleaded that the
respondent was employed by Mr Noorgat in his personal capacity as a
sole proprietor.
The respondent defended the matter and an
application for summary judgement followed. The respondent indicated
in his opposing
affidavit that he intended instituting a claim
against the applicant for monies due, owing and payable to him
arising out of his
employment with the applicant (who was not a party
to that litigation). His opposing affidavit was delivered on 2
February 2021,
and an order was taken by consent, refusing summary
judgement on 4 February 2021. As mentioned above, the present
application was
instituted by the applicant on 23 February 2021, a
few weeks later.
[29]
In returning to the present
application, the applicant, in its founding affidavit referred to and
attached a report it obtained
from a computer expert, Mr Sean Morrow
of Paradigm Forensic Services (Pty) Limited. The services of Mr
Morrow were sought because
of the delay in the return of the laptop
by the respondent, and after it was established that information on
the laptop had been
deleted.
[30]
In his report dated 17 November
2020, Mr Morrow concluded
inter
alia
that the respondent
had intentionally and without authority ‘deleted/destroyed all
data relating to the business activities
of The Focus Group from the
laptop . . . in so doing he deprived The Focus Group of access to
that data’,
that the
respondent intentionally copied data to an external drive prior to
deleting all the data, and in so doing, that he may
have obtained an
unfair advantage as he had access to their data, to which they no
longer enjoyed access.
[31]
The respondent in his answering
affidavit pointed out that the data which he dealt with during his
employment with the applicant
and which he had saved on his external
hard drive, was saved on the applicant’s server, and that the
applicant had not lost
any information due to his actions. The
conclusions by Mr Morrow were therefore incorrect. The applicant
failed to address this
issue in its replying affidavit. The
respondent also explained that when he received the laptop in
September 2019, the data on
it had been wiped clean. The laptop only
contained the profile of Mr Farouk Noorgat and the applicant was
aware that the respondent
used the laptop under this profile. The
respondent also stated that he deleted all the data on a weekly basis
and reloaded updated
files from the applicant’s server to avoid
duplications and to manage available storage. The respondent invited
the applicant
to request Mr Morrow to comment on this aspect but the
applicant did not do so in reply.
[32]
The respondent repeated what
was contained in his email of 23 April 2020 in that the information
which he retained was necessary
to quantify and prove his claim
against the applicant. He also stated that the information retained
was material to him in asserting
a defence against the applicant’s
allegation that he had deliberately and/or negligently caused it to
suffer damages in the
performance of his work duties towards the
latter part of his employment with the applicant.
[33]
From both the respondent’s
answering affidavit as well as his supplementary answering affidavit,
it is made clear that the
information which he downloaded consisted
of his pivot tables, the information relating to the incentives paid
to the applicant
by the Shield Group (which incentives were allegedly
not paid over to the respondent) and stock and sales lists and
purchase orders.
These documents would demonstrate that the stock
levels were adequate and that the applicant did not suffer any
financial losses,
as alleged by the applicant’s attorney in his
letter of 26 March 2020 and would also serve to prove his claims
against the
applicant.
[34]
The applicant, in his founding
affidavit, also refers to the so called pivot tables, extracted and
downloaded by the respondent,
as being company information unlawfully
procured by the respondent. In his answering affidavit as well as in
his supplementary
answering affidavit, the respondent was at pains to
explain that the pivot tables were not company information but
something he
had formulated as an IT tool after conducting research
on the internet, to assimilate and analyse data to do his job. The
pivot
tables themselves did not contain any permanent information or
data and was merely a formula which the respondent shared with the
applicant’s other employees.
[35]
The deponent, on behalf of the
applicant, in its replying affidavit (which I may point out dealt
only with a limited number of issues
raised by the respondent
together with a very general bare denial of the remaining
allegations) mentioned for the first time that
he had received a
phone call from the respondent’s new employer, Mr Faheem
Noorgat, in March 2020, apparently enquiring as
to what the issues
were between the applicant and the respondent. Mr Faheem Noorgat was
advised that the respondent was in possession
of the applicant’s
sensitive information and data. Mr Faheem Noorgat advised that he
would talk to the respondent and that
he would get back to him –
which he allegedly did. The respondent apparently denied being in
possession of sensitive information
but that he ‘had taken’
a few pivot tables. Mr Faheem Noorgat allegedly also advised that the
respondent had offered
the pivot tables to his new employer.
[36]
In response to these
allegations, an attorney acting on behalf of the Save Group, referred
to as Save Wholesalers Cash and Carry
CC, the respondent’s
current employer, wrote a letter to the applicant’s attorney on
7 June 2021, indicating that he
has had sight of the application
papers, including the applicant’s replying affidavit. It was
inter alia
denied that Mr Faheem Noorgat stated that the respondent had offered
the pivot tables to his new employer. It was also denied that
any
alleged business expansion by the Save Group was as the result of
information originating from the applicant. The respondent
also
denied these allegations by the applicant and stated that his current
employer uses advanced software that carries out a similar
exercise
and that the applicant’s information would be useless. He also
pointed out that offering his previous employer’s
information
to his new employer would create the perception that he cannot be
trusted with confidential information.
Legal
principles and applicable case law
[37]
It is clear from the limited
facts set out above that a number of factual disputes are apparent.
Counsel for the applicant as well
as the respondent have in their
heads of argument referred to the approach to be followed in
application proceedings. In the well-known
matter of
Plascon-Evans
Paints Ltd v Van Riebeeck Paints (Pty) Ltd,
[1]
the court held that where
‘
.
. .
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.’
[38]
Counsel for the respondent, in
their heads of argument, also referred to
Wightman
t/a JW Construction v Headfour (Pty) Ltd and another
[2]
where Heher JA said the following:
‘
[12]
Recognising that the truth almost always lies beyond mere linguistic
determination the courts have said that an applicant who
seeks final
relief on motion must, in the event of conflict, accept the version
set up by his opponent unless the latter's allegations
are, in the
opinion of the court, not such as to raise a real, genuine or
bona fide dispute of fact or are so far-fetched
or clearly untenable
that the court is justified in rejecting them merely on the papers .
. .
[13]
A real, genuine and bona fide dispute of fact can exist only where
the court is satisfied that the party who purports to raise
the
dispute has in his affidavit seriously and unambiguously addressed
the fact said to be disputed. There will of course be instances
where
a bare denial meets the requirement because there is no other way
open to the disputing party and nothing more can therefore
be
expected of him. But even that may not be sufficient if the fact
averred lies purely within the knowledge of the averring party
and no
basis is laid for disputing the veracity or accuracy of the
averment. . .
’
[39]
Counsel for the applicant
submitted, quite rightly, that the matter should be determined on the
respondent’s version. It is
common cause that the respondent
downloaded information onto his external hard drive. It was submitted
that it does not matter
whether the respondent intended to make use
of the information, and whether it was for a lawful purpose or not,
what matters is
that the respondent downloaded information which
belongs to the applicant, and to which the respondent is not entitled
to. It was
submitted that the fact that the respondent had the
information is the end of the story, from which I understood the
submission
to be that the mere act of downloading and possessing the
applicant’s confidential information justifies the final relief
being claimed by the applicant.
[40]
Counsel for the respondent, in
their heads of argument, furthermore referred to
Minister
of Land Affairs and Agriculture and others v D & F Wevell Trust
and others
[3]
in terms of which the applicant is required to make out his or her
case in the founding affidavit. A litigant should furthermore
not be
allowed to try and make out a case in a replying affidavit. The
founding affidavit must furthermore contain sufficient facts
in
itself upon which a court may find in the applicant’s favour.
[41]
In
Amler’s
Precedents of Pleadings
,
[4]
reference is made to a general duty not to use confidential
information, which may be protected by an interdict. The essential
allegations are listed as follows:
‘
(a)
The plaintiff must have a proprietary,
quasi-proprietary or other legal interest in the confidential
information.
(b)
The information must have had
the necessary quality of confidentiality.
(c)
A relationship, usually
contractual, between the parties, which imposes a duty (expressly,
impliedly or tacitly) on the defendant to preserve the confidence of
the information. An example of a contractual relationship
is that
between employer and employee or between partners and business
associates . . .
(d)
The defendant must have had
knowledge of the confidentiality of the information and its
value.
(Actual knowledge is probably not required.)
(e)
Improper possession or use of the information, whether as a
springboard or otherwise,
by the defendant.
(f)
Damages suffered, if
any.’
[5]
(Case references
omitted.)
[42]
The essential allegation which
in my view requires careful thought is whether it can be found that
the respondent improperly possessed
or used the information
downloaded by him, as a springboard or otherwise.
[43]
Counsel for the applicant, in
their heads of argument, referred to
Waste
Products Utilisation (Pty) Ltd v Wilkes and another
[6]
where the court examined in detail the six essential allegations
referred to by
Amler’s.
The following was said with
regard to springboarding:
‘”
Springboarding”
entails
not starting at the beginning in developing a technique, process,
piece of equipment or product, but using as the starting
point the
fruits of someone else's labour. Although the springboard concept
applies in regard to confidential information,
the misuse of
the fruits of someone else's labour may be regarded in a suitable
case as unlawful even where the information copied
is not
confidential
.’
[7]
[44]
It was furthermore held that
‘[i]n terms of the springboard doctrine, an interdict against
the use of confidential information
may be limited by the duration of
the advantage obtained, or the time saved, by reason of having had
access to the confidential
information’.
[8]
Reference was made to
Multi
Tube Systems (Pty) Ltd v Ponting and others
[9]
where Broome J dismissed an application for an interim interdict
where the application was only launched some six weeks after the
offending behaviour was discovered. Broome J said the following:
‘
.
. .
I
take the view that the unfair advantage of the headstart or
springboard is usually of limited duration and that there must come
a
time when the matters in question are no longer secret and that
an interdict would not then be warranted
.’
[10]
See
also in this regard
Valunet
Solutions Inc t/a Dinkum USA and another v eTel Communication
Solutions (Pty) Ltd
.
[11]
[45]
At the commencement of the
hearing before me, I asked counsel for the applicant to address me on
Multi Tube
,
especially in light of the remarks by Broome J and the delay by the
applicant in only instituting the application a year after
the
respondent’s resignation. It was submitted that the facts of
the present matter were distinguishable from those in
Multi
Tube
and that there can
furthermore be no limit to the time period when dealing with the
applicant’s personal information. I will
return to this issue
in due course.
[46]
As far as the relief being
claimed by the applicant is concerned, counsel for the applicant
indicated that he would be seeking the
relief as set out in the
notice of motion in the form of a final interdict, subject to an
amendment to para 1.2, which I will deal
with should it become
necessary. I was referred to
Southern
African Institute of Chartered Secretaries and Administrators v
Careers-in Sync CC
[12]
and in particular to the relief granted by Weiner J. It was submitted
that the relief being claimed by the applicant was loosely
based on
the orders granted by Weiner J. From her judgment, it is clear that
Weiner J undertook a detailed discussion of the relevant
case law
relating to the misuse of confidential information. She dealt with
each of the essential allegations referred to by
Amler’s
separately and held the
following regarding improper possession:
‘
[62] The
applicant further contends that having taken possession of the
appointments register upon the commencement of
its contractual
obligations and following its receipt of information distributed to
it on a confidential basis by the applicant's
members under the
auspices of the applicant, the respondent cannot treat this body of
information as its own. The conduct of the
respondent when viewed
against the backdrop of the terms of the SLA in continuing to make
use of the information that comprises
the appointments register in
the furtherance of its own business interests is wrongful and gives
rise to the delict of unlawful
competition.
.
. .
[65] By
seeking to retain the appointments register in the furtherance of its
own business endeavours the respondent
will gain an unfair advantage
or "springboard" over the applicant, which is neither
legally justifiable nor one that
it is legally entitled to (see
Multi
Tube Systems
(
Pty
)
Ltd
v Ponting and others
1984 (3) SA 182 (D)
at 189; see also
Waste
Products Utilisation
(
supra
)
at 582).
’
[47]
These findings are important,
especially in light of the submissions by counsel for the applicant
to the effect that what is relevant
is that the information
downloaded by the respondent is the applicant’s information,
and that it is irrelevant that it could
be useful to the respondent’s
new employer. With reference to the respondent’s version that
he has not made use of
the information unlawfully, it was submitted
that it did not matter, as the mere fact that he downloaded the
applicant’s
information was sufficient to entitle the applicant
to the relief sought.
[48]
I was also referred to
Traka
Africa (Pty) Ltd v Amaya Industries and another
[13]
by applicant’s counsel, as the relief claimed by the applicant
in paragraph 1.1 of the notice of motion is likewise loosely
based on
the order granted by Adams AJ. The matter related to a
confidentiality agreement entered into between the parties, and
it
was evident that the respondent had used confidential information
after his resignation when he emailed quotes to the applicant’s
clients. Adams AJ rejected the respondent’s version as being
far-fetched and also noted that the respondent at no stage offered
to
return the information which he had acquired to the applicant. The
applicant’s counsel also placed specific reliance on
what was
held at para 53, namely that it did not avail the respondent to claim
that he had no intention of using the applicant’s
information.
The finding was substantiated with reference to
Experian
South Africa (Pty) Ltd v Haynes and another
[14]
where the court dealt with the enforcement of a protectable interest
in a restraint agreement. The facts and circumstances are
however
clearly distinguishable from the present matter. Counsel for the
applicant was at pains to point out that the applicant
in this matter
is not relying on any type of restraint of trade clause or agreement
between the parties.
[49]
As far as the essential
allegations referred to by
Amler’s
is concerned, counsel for
the applicant did not make any particular submissions in this regard
before me during argument but some
of the essential allegations were
addressed in the heads of argument, albeit to a very limited extent.
It was submitted that the
evidence shows on a balance of
probabilities that:
(a)
The applicant has an interest
in the information acquired by the respondent;
(b)
The information appropriated by
the respondent was the applicant’s confidential information;
(c)
The respondent had a
contractual relationship with the applicant which imposed a duty on
him to preserve the confidence of the information
imported to him
during the course of his employment with the applicant;
(d)
The respondent knowingly
misappropriated the information to the prejudice of the applicant.
[50]
In
Rectron
(Pty) Limited v Govender
[15]
Levinsohn DJP, as part of a full bench on appeal, held (as per the
head note) :
‘
that
the appellant bore the onus of proof in respect of the proprietary
interests sought to be protected. The court found that there
was no
reasonable possibility that the first respondent would use the
confidential information of the appellant. It also considered
whether
the appellant’s rights to protection of its confidential
information relating to its customers’ needs and buying
patterns was overweighed by the respondent’s right not to be
economically inactive. The court found that the respective bargaining
positions of the parties to the restraint agreement were such that
the respondent’s rights to be economically active had
to be
given greater weight.’
The
court dismissed the appeal.
[51]
As far as the requirements for
a final interdict is concerned, it is trite that a court must be
satisfied that the applicant has
a clear right, that an injury has
actually been committed or is reasonably apprehended, and that there
is no other satisfactory
remedy available to the applicant. Both
sides referred me to
Setlogelo
v Setlogelo
[16]
in which these requirements are clearly set out.
The
applicant’s contentions
[52]
The applicant’s counsel
concentrated most of his efforts on one of the respondent’s
reasons for downloading the applicant’s
information, namely to
quantify his claim against the applicant. A lot was made about how
the claim, which was attached to the
respondent’s supplementary
affidavit, was formulated. It was suggested that the respondent could
simply have copied the information
regarding the amounts instead of
downloading all the information he did.
[53]
It was also submitted that the
respondent could have requested the information utilising the
provisions of the
Promotion of Access to Information Act 2 of 2000
,
instead of ‘stealing’
the
information from the applicant.
[54]
I requested the applicant’s
counsel to address me on the
‘
with
prejudice’ tender
made by
the respondent in a letter dated 21 September 2021, namely that he
will delete all the applicant’s information provided
that an
undertaking is given that the applicant will not pursue a damages
claim against the respondent, failing which, the respondent
will
place the hard drive together with all hard copies in the custody of
the registrar of the high court for safekeeping for use
in the
pending action and any future actions. The response by counsel was
simply that it was too late.
[55]
Very little was said about the
respondent’s other reason for downloading the information,
namely to protect himself against
the damages claim which the
respondent was threatened with in no uncertain terms by the
applicant’s attorney.
[56]
Counsel for the applicant
persisted with the relief in the notice of motion, despite the fact
that at the time of the hearing, some
20 months have elapsed since
the respondent had left the employment of the applicant.
[57]
Counsel for the applicant
conceded that the applicant failed to explain why there was a delay
of a year before instituting the application.
The
respondent’s contentions
[58]
Counsel for the respondent
submitted in their heads of argument that the applicant’s
founding affidavit was replete with misrepresentations
and false
information. The respondent’s counsel concentrated his efforts
on what he referred to as
‘
the
eight lies’ by
the
applicant in his founding affidavit, as well as the drastic
infringement the relief sought by the applicant would have on the
respondent’s rights. The word ‘lie’ might be a bit
strong in certain of the instances - I will however only refer
to a
few.
[59]
It was submitted that the
applicant stated that the respondent resigned on 4 February 2020,
whereas he only resigned with effect
from 29 February 2020.
[60]
It was submitted that the
allegation by the applicant that it had become aware only ‘recently’
that the respondent had
failed to return the laptop immediately, that
all the applicant’s information had been deleted and that the
information containing
inter
alia
pivot tables had been
extracted from the server was simply not true. Whilst the founding
affidavit was attested to on 22 February
2021, the letter from the
applicant’s attorney and the discussions held in February and
March 2020 clearly indicate that
the applicant had known about the
downloaded information as early as February and March 2020.
[61]
With reference to the
allegation that the respondent contacted 4Most and requested their
assistance in uploading data, it was submitted
that this was a
blatant lie and was not borne out by the email sent by the respondent
to 4Most, requesting a quote. In this regard,
the email sent by the
respondent to 4Most speaks for itself and it is clear that was is
contained in the founding affidavit is
indeed incorrect.
[62]
It was also submitted that the
applicant had conceded that the respondent had done the work referred
to although it says it was
done in 2015 and not 2016.
[63]
The respondent’s counsel
also referred to the conclusions by the expert Mr Morrow, and in
particular the reference to the
respondent having deleted or
destroyed data, thereby denying the applicant access to such
information or data. It was submitted
that the inclusion of these
so-called conclusions were engineered to bolster the applicant’s
case. The respondent’s
response to these conclusions, namely
that all the information was still contained on the applicant’s
server, was left unchallenged
by the applicant. It was submitted, and
I agree, that this aspect must clearly have been within the knowledge
of the applicant,
yet he failed to correct the impression created by
Mr Morrow and simply quoted what was contained in his report almost
verbatim.
[64]
It was also submitted that the
allegation that the Save Group was expanding its health and beauty
sections, with a hint that the
respondent’s knowledge would
have assisted his knew employer, was a fabrication. It was also
submitted that no evidence had
been provided to support these
allegations, and if the applicant had a genuine apprehension that the
Save Group was utilising its
information, it would have joined the
Save Group as a party to these proceedings.
[65]
Counsel for the respondent also
referred to the allegations by the applicant in its replying
affidavit that the respondent’s
new employer had phoned and
inter alia
informed
him that the respondent had only taken a few pivot tables, which
contained information which was offered to the respondent’s
new
employer. It was submitted that these important allegations were not
included in the founding affidavit as it was a fabrication,
and
clearly an afterthought, to bolster the applicant’s case in
reply. It is also interesting to note that none of this was
mentioned
by the applicant’s attorney in his letter dated 26 March 2020.
In my view, these allegations by the applicant in
reply raises a
concern in that the applicant, allegedly knowing that the
respondent’s new employer has been offered its pivot
tables,
and is allegedly expanding its health and beauty range as a result of
receiving this information, does nothing for a period
of a year, and
when it takes action, it makes no mention of this in its founding
papers and, as already mentioned, does not join
the respondent’s
employer to these proceedings. I have to agree that these allegations
were clearly a fabrication.
[66]
With reference to the
respondent’s tender to either destroy the information or hand
the hard drive to the registrar, it was
submitted that the hard drive
had in fact been handed to the registrar after the applicant failed
to respond to the tender. The
respondent was therefore no longer in
possession of the hard drive.
[67]
In responding to the submission
by the applicant’s counsel that the offer came too late, it was
submitted that the respondent
had consistently showed that he wanted
to avoid incurring legal costs, especially after a threat by the
applicant that he would
drown the respondent in legal costs. The
respondent offered to attend a meeting in his email of 23 April 2020
in order to resolve
any issues, to which no reply was received.
[68]
Counsel for the
respondent also briefly referred to
Waste
Products supra,
which was
referred to by applicant’s counsel, and submitted that in the
present matter there is no indication that any information
was used
as a ‘springboard’ of any kind.
It
was submitted that the information downloaded by the respondent was
crucial to him, securing proof of his claim against the respondent
and to resist and defend himself against the applicant’s
threatened damages claim.
[69]
Reference
was also made to
Multi
Tube supra
and it was submitted that the applicant’s delay in bringing the
application is inexcusable.
[70]
In
conclusion it was submitted, with reference to the requirements of a
final interdict and the relief being claimed by the applicant,
that
the applicant has not shown that it has a clear right and that it has
an alternative remedy in the form of a damages claim.
It might also
be appropriate at this stage to refer to a submission by the
respondent’s counsel that the relief being sought
in the notice
of motion would severely restrict the respondent’s ability to
perform his duties at his current employer. Reference
is made in the
relief to the applicant’s suppliers. It was submitted that it
is well known that both the applicant and the
Save Group would order
products from the same supplier. It was submitted, with reference to
section 22 of the Constitution, that
the respondent’s rights
would be severely infringed if an order in this regard is granted.
Discussion
[71]
The
applicant seeks far reaching relief against the respondent, simply
because the respondent downloaded its confidential information,
arguing that the mere possession of its confidential information is
enough to satisfy the requirements for such relief.
[72]
Bearing
in mind what was stated in
Amler’s
and
the authorities referred to above, I am of the view that an applicant
claiming relief such as in the present matter, has to
show that there
was improper use or possession of the confidential information,
whether as a springboard or otherwise. In this
matter there is
absolutely no indication whatsoever that the information was used as
a springboard by the respondent or his new
employer for that matter.
[73]
What
is meant by the word ‘otherwise’ is of course open to
interpretation but such use or possession for something ‘otherwise’
would still have to be shown to be improper. The meaning of the word
‘improper’ is described by the Cambridge English
Dictionary as being against a law or a rule, dishonest or illegal.
The applicant has failed to provide any evidence of the improper
use
of the downloaded information. What I am left with is the
respondent’s version that he downloaded the information to
be
able to calculate the quantum of his claim against the applicant and
to be able to defend himself against the applicant’s
threatened
damages claim.
[74]
Counsel
for the applicant urged me to consider the probabilities and argued
in reply that it is improbable that the respondent downloaded
all the
information he did during February 2020, purely to protect himself. I
am however of the view that the probabilities do
in fact support the
version of the respondent. It is clear from the correspondence put up
by the respondent that he was of the
view that the applicant had to
pay him for work he had done and that the applicant was apparently
reluctant to do so. The correspondence
addressed to the respondent by
the applicant’s attorney futhermore makes it clear in no
uncertain terms that the applicant
was accusing the respondent of
causing it huge financial losses. I can find nothing far-fetched or
clearly untenable in the respondent’s
version.
[75]
As
mentioned above, the applicant placed reliance on
Traka
Africa
as
authority that it does not avail a respondent to claim that he had no
intention of using the applicant’s information; mere
possession
by implication being sufficient. To accept this with reference to the
present matter would fly in the face of what is
required by
Amler’s,
and
what was found in
Waste
Products
and
Careers-in-Sync.
[76]
There
is much to be said about certain misrepresentations and apparent
fabrications contained in the founding and replying affidavit
attested to on behalf of the applicant. It is in my view clear that
the applicant only decided to pursue the present application
after
receipt of the respondent’s opposing affidavit in the summary
judgment application in the regional court matter. It
is possible
that memories have faded, bearing in mind that the application was
instituted a year after the respondent resigned,
but it does not
excuse the blatant misrepresentation of what the respondent allegedly
requested 4Most to do. The failure to correct
the impression created
by Mr Morrow that the information which was deleted was no longer
available, also leaves a bitter taste
in my mouth and is
inexcusable.
[77]
Another
consequence of the applicant’s delay in instituting the
application is of course the effectiveness and fairness of
the relief
being sought more than a year and a half after the respondent’s
resignation. Bearing in mind what was stated by
Broome J in
Multi
Tube,
the
applicant wants to restrain the respondent from disclosing
information which must be seriously outdated by now. It also bears
mentioning that the relief in this regard, set out in paragraph 1.1,
refers to the applicant’s ‘suppliers and business
associates’ and ‘prospective and existing customers’
without mentioning any entities by name, making it vague
and probably
impossible to enforce.
[78]
The
relief set out in paras 1.2 and 1.3 seek to interdict and restrain
the respondent from soliciting business from the applicant’s
suppliers and to approach the applicant’s suppliers and
associates whilst holding out to be in the applicant’s employ.
Once again no names of these suppliers or associates are mentioned
but from the papers it is clear that the respondent is employed
as a
buyer for the Save Group, and would have to engage with suppliers
whom his current employer has in common with the applicant,
just
through the nature of its business. I agree with the submissions made
on behalf of the respondent that this relief would amount
to a
restraint on the respondent and is an infringement of the
respondent’s right in terms of section 22 of the Constitution
to freely choose his occupation. There is furthermore no evidence
that the respondent has approached any suppliers or associates
of the
applicant whilst holding out to still be in the applicant’s
employ, or that there is any likelihood that he will do
so.
[79]
As
far as the relief in paras 1.4 and 1.5 is concerned, it is clear that
in light of the respondent having handed over the hard
drive as well
as the hard copies of the information to the registrar for
safekeeping, not much further can be done in this regard.
I accept,
as submitted by the applicant’s counsel in reply, that the
applicant was not aware of this. However the tender
filed on behalf
of the respondent makes it clear that in the absence of the applicant
responding, the hard drive and documents
would be handed over to the
registrar’s office.
[80]
In my
view the applicant has failed to satisfy the requirements for a final
interdict. Interdictory relief is
inter
alia
aimed at preventing future unlawful conduct, of which I can find no
evidence. Bearing all the aforesaid in mind, I am not satisfied
that
the applicant has made out a case for the relief sought and it is
accordingly not entitled to the relief claimed.
Costs
[81]
Only
counsel for the respondent addressed me specifically on the question
of costs. I was urged to consider ordering costs against
the
applicant on a punitive scale. It was submitted that the devious
manner in which the founding affidavit was couched, together
with the
number of misrepresentations contained therein, justified costs on a
punitive scale.
[82]
I was
referred to the proceedings on 10 June 2021 before Van Zyl J, who
reserved the costs on that day. I was also addressed on
the costs of
the condonation application. It was submitted that the applicant’s
opposition was frivolous and it should therefore
pay the costs of the
application. One has to consider though that the respondent’s
supplementary affidavit was out of time,
and that he was therefore
obliged to seek condonation. I do however agree that the opposition
was not justified.
[83]
It is
trite that the question of costs falls within the discretion of the
court. The general rule is that costs should follow the
result.
Although the applicant’s founding affidavit, not to mention the
replying affidavit, contains various misrepresentations,
I am of the
view that a punitive cost order is not justified in this instance and
I will accordingly refrain from exercising my
discretion in the
respondent’s favour in this regard. Both parties instructed
senior and junior counsel and I see no reason
not to include costs
consequent upon the employment of two counsel.
Order
[84]
I
accordingly make the following order:
1.
The
application is dismissed with costs, such costs to include the costs
consequent upon the employment of two counsel.
2.
The
applicant is directed to pay the costs consequent upon the hearing of
10 June 2021, as well as the costs incurred by the respondent
as a
result of the applicant’s opposition to the respondent’s
application for condonation, such costs to include the
costs
consequent upon the employment of two counsel.
____________________
BEZUIDENHOUT
AJ
APPEARANCES
Date
of hearing :
7 October 2021
Date
of judgment : 28
January 2022
For
Applicant : Mr
VM Naidoo
SC
Mr
SN Sangham
Instructed
by :
Sangham
and Associates
188
Retief Street
Pietermaritzburg
Tel:
(033) 394 1807
For
Defendants: Mr
YN Moodley SC
Mr V Moodley
Instructed
by :
TMJ Attorneys
2 Montrose Park Boulevard
Victoria Country
Club Estate Office Park
170 Peter Brown Drive, Montrose
Pietermaritzburg
Tel: (033) 341 9100
[1]
Plascon-Evans Paints Ltd v Van
Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984
(3) SA 623
(A) at 634H-I.
[2]
Wightman t/a JW Construction v
Headfour (Pty) Ltd and another
[2008]
ZASCA 6
;
2008 (3) SA 371
(SCA) paras 12-13.
[3]
Minister of Land Affairs and
Agriculture and others v D & F Wevell Trust and others
[2007]
ZASCA 153
;
2008 (2) SA 184
(SCA) para 43.
[4]
LTC Harms
Amler’s
Precedents of Pleadings
9
ed (2018) at 93.
[5]
Ibid at 93-94.
[6]
Waste Products Utilisation (Pty)
Ltd v Wilkes and another
2003
(2) SA 515 (W).
[7]
Ibid at 582F.
[8]
Ibid at 583F-G.
[9]
Multi Tube Systems (Pty) Lld v
Ponting and others
1984
(3) SA 182 (D).
[10]
Ibid at 189H-I.
[11]
Valunet Solutions Inc t/a Dinkum
USA and another v eTel Communication Solutions (Pty) Ltd
2005
(3) SA 494 (W).
[12]
Southern African Institute of
Chartered Secretaries and Administrators v Careers-in-sync CC
[2014]
ZAGPJHC 283 (the pdf version).
[13]
Traka Africa (Pty) Limited v Amaya
Industries and another
[2016]
ZAGPJHC 24.
[14]
Experian South Africa (Pty) Ltd v
Haynes and another
2013
(1) SA 135 (GSJ).
[15]
Rectron (Pty) Limited v Govender
[2009] JOL 23969 (N).
[16]
Setlogelo v Setlogelo
1914
AD 221.