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[2021] ZAGPJHC 684
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HV Test Pty) Ltd v Lead HV (Pty) Ltd and Others (2020/34871) [2021] ZAGPJHC 684 (12 August 2021)
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IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO:
2020/34871
Reportable:No
Of
Interest to other Judges:No
Revised:
Yes
12/08/2021
In
the matter between:
H.V.
TEST (PTY) LTD
(Registration
Number: 2004/035038/07)
Applicant
and
LEAD
HV (PTY) LTD
(Registration
Number: 2015/361131/07)
First Respondent
LEDWABA,
MELOSI EZEKIEL
(ID
[....]) Second
Respondent
SHEIK,
AMEERA
(ID
[....])
Third
Respondent
LOMBAARD,
BARRY
(ID
[....]) Fourth
Respondent
JUDGMENT
TERNENT, AJ
:
INTRODUCTION AND
COURT ORDER
[1]
This case came before me on 14
April 2021, when the
applicant (“H.V. Test”) sought to pursue its interdictory
relief against the first respondent,
Lead HV (Pty) Limited (“Lead
HV”) and the fourth respondent, its General Manager, Barry
Lombaard (“Lombaard”).
The application had been brought
on 13 November 2021, on an urgent basis, against Lead HV, Lombaard,
the second respondent, Melosi
Ezekiel Ledwaba (“Ledwaba”)
and the third respondent, Ameera Sheik (“Sheik”), the
latter being erstwhile
employees of H.V. Test. Ledwaba had been
employed by H.V. Test as an internal sales and telesales consultant
and Sheik as a sales
consultant. The application was found not to be
urgent in regard to Lead HV and Lombaard.
[2]
As such, Bam AJ granted an order interdicting and restraining Ledwaba
and Sheik, who did not oppose the application, from:
2.1
utilising,
communicating or publicising any of
the applicant’s
Confidential information;
2.2
utilising or publicising customer contact details of persons with
whom the applicant deals;
2.3
utilising the applicant’s Confidential information regarding
contracts for which it has
tendered, bid or was negotiating at any
time up to the date hereof;
2.4
utilising or publicising the applicant’s Confidential
information regarding the internal
operations of the applicant’s
business including its business and financial relationships with any
of the applicant’s
suppliers or sub-contractors;
2.5
approaching directly or indirectly (or assisting any other person in
approaching directly or indirectly)
any client, customer or principal
of the applicant in order to unlawfully compete with the applicant
for their benefit or the benefit
of any other person in respect of
any contract which the applicant has tendered, bid or was negotiating
at any time up to the date
hereof;
2.6
taking advantage to the applicant’s prejudice of any
relationship involving the use of the
applicant’s pricing
information or customer contact details in respect of any contract
for which the respondents have quoted,
tendered, bid or was
negotiating at any time up to and including the date hereof, for
their own benefit or the benefit of any other
person;
2.7
accessing or utilising or any/all Confidential information which have
come into the possession
of in consequence of the employment of the
second and third respondents with the first respondent;
2.8 from
taking up employment with the first respondent and/or fourth
respondent and/or any close
corporation, partnership or company in
contravention of their restraints of trade.
2.9 The
second and third respondents were compelled to:
2.9.1 disclose
with sufficient particularity the details of any person, close
corporation, partnership or
company to whom they have disclosed any
of the applicant’s trade secrets or Confidential information;
2.9.2 disclose
with whom they have conducted business or with whom they have
attempted to conduct business
utilising the Confidential information;
2.9.3
dispose/delete/destroy the applicant’s confidential
information and allow the applicant’s
nominated IT professional
access to inspect its telephones, computers, devices, tablets, memory
sticks and/or hard drives to ensure
that they have done so.
2.10 The
second and third respondents were ordered to pay the costs of the
application on the attorney
and client scale.
[3]
In the face of the interdict which was granted against Ledwaba and
Sheik,
I can accept that confidential information had been filched by
both Ledwaba and Sheik and that in so doing, they had wrongfully
appropriated the confidential information, which was acquired during
their employment with H.V. Test, and used such information
to
approach and induce H.V. Test’s customers, to move their
business to Lead HV, which it is common cause is a direct competitor
of H.V. Test.
[4]
As such, I am enjoined to consider that application and the relief
sought
for a final interdict as against Lead HV and Lombaard. Neither
of the parties sought to supplement their papers or had done so.
I
was, accordingly, not informed as to whether Ledwaba and Sheik had
complied with the Court order and cannot deal further with
the order,
as granted.
AMENDED
RELIEF
[5]
That said, during the course of argument it became apparent that the
relief
sought as against Lead HV and Lombaard was broad and untenable
in the face of the affidavits. This was raised by Mr Labuschagne,
and
I was inclined to agree with him. As a consequence, Ms Lombard, in
reply, submitted that the confidential information which
H.V. Test
sought to protect would be defined and the remaining relief sought
would be tailored, accordingly. Mr Labuschagne did
not oppose the
amendment of the relief. A draft order was forwarded to me,
subsequent the hearing.
[6]
The relief now sought as against Lead HV and Lombaard is as follows:
6.1
To interdict and/or restrain the first and fourth respondents from:
6.1.1
utilising, communicating or publicising any of the applicant’s
confidential
information comprising of the applicant’s (a)
customer lists; (b) training lists; (c) follow up quotes lists (“the
confidential information”);
6.1.2
utilising or publicising customer contact details of persons with
whom the applicant
deals;
6.1.3
approaching directly or indirectly (or assisting any other person in
approaching
directly or indirectly, any client, customer or employee
of the applicant in order to unlawfully compete with the applicant,
for
their benefit or the benefit of any other person in respect of
any contract for which the applicant has tendered, bid or was
negotiating
at any time up to the date hereof;
6.1.4
accessing or utilising any/all confidential information which has
come into their
possession in consequence of the employment of the
second and third respondents with the first respondent;
6.2
To compel the first and fourth respondents to disclose with
sufficient particularity
the details of any person, close
corporation, partnership or company:
6.2.1
to whom they have disclosed any of the applicant’s confidential
information;
and
6.2.2
with whom they have conducted business or with whom they have
attempted to conduct
business utilising the confidential information;
6.3
To compel the first and fourth respondents to dispose or delete
or
destroy the applicant’s confidential information and allow the
applicant’s nominated IT professional access to inspect
its
telephones, computers, devices, tablets, memory sticks and/or hard
drives to ensure that they have done so;
6.4
Costs of this application on the attorney and client scale.
[7]
As the amended draft order seeks to tailor and narrow the relief and
does
not add thereto, there is and can be no prejudice to Lead HV and
Lombaard. I was not notified of any objection or prejudice to the
draft order received.
H.
V. TEST’S CASE
[8]
H.V. Test was established in 1985 and is a major supplier of goods
and
services in the Medium Voltage, High Voltage and Extra High
Voltage electrical engineering field. This involves, at a high level,
the sale of electrical test equipment/instruments, the repair and
calibration thereof, training courses in high voltage electrics
and
commissioning and maintenance services in this field. H.V.Test is
also the appointed service and calibration centre for its
branded
electrical equipment manufactured by Baker, T&R, DV Power, Baur,
to name but a few. It operates countrywide and it
competes for new
business in both the public and private sectors and is involved in
tender processes in the public sector.
[9]
Lead H.V, its direct competitor, was established by a Mr Mathibe
Edward
Moela (“Moela”) who remains its sole shareholder
and director. Lead HV also provides electrical test instrumentation
for the power utility high voltage industry and electrical
contractors’ market. Moela was an erstwhile employee of H.V.
Test. He resigned from its employ on 28 February 2015. He, like
Ledwaba and Sheik had signed a written contract of employment which
included restraint of trade and non-disclosure obligations. Lombaard
was an erstwhile employee too, employed by H.V. Test as a
repair
technician and metrologist. He was so employed from 4 June 2012 until
3 February 2014. Lombaard also was required in his
H.V. Test
employment contract to accept non-disclosure and restraint
obligations. He resigned from its employ for personal reasons.
[10]
Ledwaba was summarily dismissed from H.V. Test’s employ, on 15
May 2020, as there
was a breakdown of the trust relationship. Sheik
resigned from the employ of H.V. Test on 30 June 2020, allegedly due
to ill health.
[11]
Lead HV disputes that it ever employed Ledwaba stating that he was
simply a consultant
and that he earned commission. H.V. Test counters
this by demonstrating that Lombaard, in an email, arranged for LEAD
HV business
cards to be printed for himself, Moela and importantly
Ledwaba whose job description was to be that of sales representative.
Furthermore,
in a further email dated 6 August 2020, Lombaard
instructs the IT person to create a new email account for Ledwaba,
namely melosi@leadhv.co.za.
No plausible explanation explains these
actions away and so it appears on the probabilities that Ledwaba was
an employee. Even
if I am wrong, in the light of my findings below,
nothing turns on whether or not Ledwaba was a consultant or an
employee of Lead
HV. This is because Sheik was an employee of Lead HV
and some two weeks later, i.e. in mid-July 2020, having resigned from
H.V.
Test on 30 June 2020, commenced employment with Lead HV. Early
in this employment she commenced sending email correspondence to
Lombaard and, as canvassed below, discloses confidential information
concerning the client base of H.V. Test to Lombaard and Lead
HV in
breach of her non-disclosure and restraint obligations.
[12]
The confidential information which H.V. Test seeks to protect is its
customer lists, training
lists and follow up quote lists. This
information, was stored on digital databases which H.V. Test had
expended substantial effort,
time and costs in creating. These
databases were easily accessed, reproduced and extracted by H.V.
Test’s employees, on a
daily basis, and were essential to its
efficient operation and ability to compete for continued and/or new
work.
[13]
The lists, in digital format, provided information with regard to
sales opportunities both
past, current and future and contained the
following information:
13.1
Clients names/identities with contact details comprising an email
address and cell phone number
for key contact persons at the clients;
13.2
Setting out what products and services including repairs, training,
calibration and site work
had been supplied to the clients and the
timing of future deliverables including products and services to its
clients; and
13.3
Setting out clients’ service and upgrade requirements in regard
to equipment/ instruments
that had been supplied or may need to be
supplied and setting out the specificity of such equipment and
service requirements also
recording equipment supplied that was due
for calibration, based on historical sales.
THE
ANTON PILLER ORDER
[14]
The genesis
of the urgent relief that was sought against Ledwaba and Sheik, Lead
HV and Lombaard stemmed from an Anton Piller order
that was granted
by Molahlehi J on 10 September 2020.
[1]
The order was granted by way of a rule nisi and made final, on 28
September 2020 before Madiba J, permitting H.V. Test to make
copies
of the items identified and allowing it to take possession of copies
of hard drives or documents which were placed in the
custody of the
Sheriff of the High Court.
[15]
It was, as a consequence of the evidence that was obtained under the
Anton Piller order,
that it was established that Ledwaba and Sheik
had, in the course of their employment, filched the confidential
information which
they had used in the course of their employment
with Lead HV to unlawfully compete to H.V. Test’s prejudice.
[16]
The Anton
Piller order was sought when it became evident that a company phone
which had been given to Ledwaba and returned by him
together with his
laptop computer, (as also required from Sheik), on the termination of
their employ, contained a g-mail application
with a logged in g-mail
account which belonged to Ledwaba. The g-mail account was his
personal account, namely
meledwaba@gmail.com
.
It was this g-mail account that allowed H.V. Test to learn that
Ledwaba and Sheik were employed by Lead HV, that business cards
had
been printed, and an email address furnished to Ledwaba. Importantly,
it disclosed email communications between Lombaard and
Sheik and that
Sheik had been employed as an internal sales representative –
the words “Internal Sales” appearing
after her name
Ameera Sheik in the signature block at the foot of her email.
[17]
Having assembled a team comprising the deponent to the founding
affidavit, Sean Goodwin,
a director and shareholder of H.V. Test, and
Haley Breda, also a director and shareholder, and other staff members
including Johan
Jacobs, Lizette Kloppers (“Kloppers”),
Lize-Mari Sarakis and Adarsh Maharaj they sifted through the
voluminous readable
data which had been processed by various internal
and external IT experts, on behalf of H.V. Test, to find conclusive
evidence
of the conduct of Ledwaba and Sheik and furthermore the role
played by Lead HV and Lombaard, in employing them, in the light of
their access to the confidential information.
[18]
In this regard, H.V. Test avers that in employing Ledwaba and Sheik,
Moela and Lombaard,
as erstwhile employees of H.V. Test, knew full
well that they would have been bound by restraint and non-disclosure
obligations,
as they were, and furthermore that the confidential
information would be disclosed to Lombaard and Lead HV thereby
permitting it
to compete unfairly and unlawfully with H.V. Test which
it knew to be a direct competitor.
[19]
Insofar as relief is sought against Lombaard, it is important to
emphasise that Lombaard
had left H.V. Test’s employ in 2014 and
was no longer bound by his restraint or non-disclosure obligations.
As such, the
claims founded against Lead HV and Lombaard are based on
unlawful competition.
LEAD
HV’S CASE
[20]
Lead HV, in the face of the Anton Piller and its execution, states
that it “dawned
upon the fourth respondent [Lombaard] that the
third respondent [Sheik] had information in her possession” and
her employment
was terminated, on or about 29 September 2020, after
she had furnished an affidavit to Lead HV, which is dated 27
September 2020.
In this affidavit, she confirms that the Anton Piller
Court order was served on her, on 14 September 2020, and that she
handed
over all electronic devices, paperwork or any documents that
were linked to H.V. Test. She also confirmed that she took up
employment
with Lead HV, which she knew to be a competitor, and that
she at all times worked from home due to the fact that the country
was
in lockdown as a consequence of the Covid-19 pandemic. Notably,
she sought to confirm that she commenced employment with Lead HV
and
brought in her own leads and/or clients and that Lombaard assisted
her with existing potential clients instructing her to follow
up with
them – an allegation to which I will return later.
[21]
In the affidavit deposed to by Lombaard, which is confirmed by Moela,
in a confirmatory
affidavit on behalf of Lead HV, they immediately
aver that as the companies are direct competitors, there will, as
anticipated,
be an overlap of clients. To that extent, any mutual
clients that have been approached by it and Lombaard, are existing
clients
and the inferences which are sought to be drawn from the
contact made with these clients is unsubstantiated and do not assist
H.V.
Test’s case. Attached to the answering affidavit are
customer quote reports from 1 June 2016 to 28 February 2021 which do
reflect an overlap of clients. This is not unexpected given that the
two companies compete for the same work.
[22]
The law is
trite that companies are entitled to compete freely and that these
rights are protected. That said, there is a body of
common law and
protections in the Constitution which protect the wrongful and
unlawful interference with a trader’s rights.
[2]
[23]
Lombaard and Lead HV characterise the application as a “witch
hunt” to prevent
and limit lawful competition. Lombaard says
that Lead HV’s turnover in the 2018/2019 year was R7 million
and in the 2019/2020
year was R13 million. He contends that this
ostensible confidential information is not required by it to
establish its presence
in the market. Importantly, Lombaard
emphasises that he and, consequently, Lead HV had no knowledge of
what Ledwaba and Sheik had
with them or received from H.V. Test, that
their customers overlap and that it was only when it dawned on them,
as stated aforesaid,
that Sheik had information in her possession –
a concession, I believe, that they recognised that the information
which she
brought to them was confidential information deserving of
protection, they terminated her employ.
UNLAWFUL
COMPETITION
[24]
In seeking final interdictory relief, H.V. Test has to show that:
24.1
it has a clear right and that there has been an interference
with
such right;
24.2
it has as a consequence suffered an injury or it reasonably
apprehends that an injury will be committed; and
24.3
there is no other satisfactory remedy available to it
other than an
interdict.
THE
CLEAR RIGHT
[25]
In this regard, the right which H.V. Test seeks to protect is its
goodwill. It says that
it has a prestigious reputation and
significant goodwill grown over the years by virtue of insights
gleaned through experience
in amassing its client base formulated
into contact lists, its ability to assess service and equipment
requirements and its knowledge
of its clients’ needs and
product specifications formulated into follow up and training lists.
The common law affirms that
this is a right worthy of protection.
[26]
As set out
in
Atlas
Organic Fertilisers (Pty) Ltd v Pikkewyn Ghwano (Pty) Ltd and
Others
:
[3]
“
It is important to note
that the reference by the Court to the plaintiff’s ‘right
to attract custom’ as being
the right it has as a trader which
is protected from wrongful interference by a competitor, is the same
as the ‘reg op die
werfgrag’ which is the rights H J O
Van Heerden seeks to protect in Grondslae van die Mededingingsreg
(supra). Sometimes
this is referred to as the trader’s
goodwill, which is defined by Lord MacNaughten in Commissioners of
Inland Revenue v Muller
and Co Margarine Ltd
1901 AC 217
at 224 as
‘the attractive force that brings in custom’
.”
[27]
In
Commissioners of Inland Revenue v Muller and Co Margarine Ltd
(supra) Lord MacNaughten described goodwill at 217 as follows:
“
It is a thing very easy to
describe, very difficult to define. It is the benefit and advantage
of the good name, reputation and
connection of a business. It is the
attractive force which brings in custom. It is the one thing which
distinguishes an old-established
business from a new business at its
first start. The goodwill of a business must emanate from a
particular centre or source. However
widely extended or diffused its
influence may be, goodwill is worth nothing unless it has power of
attraction sufficient to bring
customers home to the source from
which it emanates. Goodwill is composed of a variety of elements. It
differs in its composition
in different trades and in different
businesses in the same trade. One element may preponderate here and
another element there.
… For my part, I think that if there is
one attribute common to all cases of goodwill it is the attribute of
locality. For
goodwill has no independent existence. It cannot
subsist by itself. It must be attached to a business. Destroy the
business, and
the goodwill perishes with it, though elements remain
which may perhaps be gathered up and be revived again. No doubt,
where the
reputation of a business is very widely spread, or where it
is the article produced rather than the producer of the article that
has won popular favour, it may be difficult to localise goodwill.”
[28]
Lord Lindley then said:
“
Goodwill regarded as
property has no meaning except in connection with some trade,
business, or calling. In that connection I understand
the word to
include whatever adds value to a business by reason of situation,
name and reputation, connection, introduction to
old customers, and
agreed absence from competition, or any of these things, and there
may be others which do not occur to me. In
this wide sense, goodwill
is inseparable from the business to which its adds value, and, in my
opinion, exists where the business
is carried on. Such business may
be carried on in one place or country or in several, and if in
several there may be several businesses,
each having a goodwill of
its own.”
[29]
Furthermore,
in
Dun
and Bradstreet (Pty) Ltd v SA Merchants Combined Credit Bureau
(Cape)
(Pty) Ltd
[4]
Corbett J dealing with a case where the business had utilised
confidential information compiled by its competitor said at
221C-222A:
“
Reverting to the position in
our law, and without attempting to define generally the limits of
lawful competition, it seems to me
that where, as in this case, a
trader has by the exercise of his skill and labour compiled
information which he distributes to
his clients upon a confidential
basis (i.e. upon the basis that the information should not be
disclosed to others), a rival trader
who is not a client but in some
manner obtains this information and, well knowing its nature and the
basis upon which it was distributed,
uses it in his competing
business and thereby injures the first mentioned trader in his
business, commits a wrongful act vis-à-vis
the latter and will
be liable to him in damages. In an appropriate case the plaintiff
trader would also be entitled to claim an
interdict against the
continuation of such wrongful conduct. Although there is no precise
precedent in our law for this proposition,
I am of the opinion that
it is a well-founded development of our law relating to unlawful
competition in trade and is in accordance
with trends of legal fact
that the information is distributed upon a confidential basis to a
limited class of persons prevents
it, in my view, from becoming
public property capable of being used or imitated by rival traders.
In such circumstances, the conduct
of a rival trader who obtains and,
well knowing the position, uses the information to advance his own
business interests and activities
amounts to a deliberate
misappropriation and filching of the product of another's skill and
labour. Such conduct must, in my view,
be regarded as dishonest and
as constituting a fraud upon the compiler of the information. I
consider that, as in the case of false
misrepresentations concerning
one's own wares or of passing-off, our Courts should treat this as
constituting unlawful competition
and as being actionable at the suit
of the trader damnified thereby. As in those cases, the conduct of
the trader misappropriating
the information would amount to an
infringement of the rights of the compiler thereof to carry on his
trade and attract custom
without unlawful interference from
competitors; and the damage suffered would normally consist of the
loss of customers or potential
customers who have been induced by
such conduct to deal with his competitor rather than with the
compiler himself. Bearing in mind
the Aquilian character of a claim
based upon such conduct, it seems to me that the suffering of damage
in this form and its causal
connection with the acts of unlawful
competition are essential ingredients of the claimant's cause of
action.”
[30]
On the evidence before me, Lead HV and Lombaard do not dispute that
on execution of the
order, on 14 September 2020, the confidential
information was found in computer readable form stored inter alia on
Lead HV’s,
Ledwaba’s, Sheik’s and Lombaard’s
computers, laptops, external hard drives, servers, mobile phones,
handheld
palm devices and related equipment. No effort is made to
deal with this allegation.
[31]
It certainly was not common cause, as submitted to me by Mr
Labuschagne, that none of this
information made its way on to Lead HV
and Lombaard’s electronic devices, as gleaned from the
execution of the Anton Piller
order.
[32]
Once the H.V. Test team analysed all of the documentation obtained it
became clear that
both Ledwaba and Sheik had unlawfully copied and
pasted information and data from H.V. Test’s databases into
what is termed
“
extracted regional customer lists
”,
i.e. lists for the regions of Gauteng, KwaZulu-Natal, Free State,
Limpopo, Mpumalanga and Cape Town. This was also evident
from the
manner in which they copied and pasted these lists which resemble the
identical format of the lists created by H.V. Test
and stored on its
database.
[33]
Having done so, it is averred that they shared this and related
information with Lead HV
and Lombaard so they too had possession and
access to these extracted regional customer lists.
[34]
As a consequence, it is averred that Lead H.V and Lombaard,
himself and/or with the
aid of Ledwaba and Sheik, have:
34.1
persuaded certain of H.V. Test’s clients to switch their
business to
Lead HV;
34.2
quoted for new business in competition with H.V. Test;
34.3
entered into negotiations with H.V. Test’s customers; and
34.4
actively solicited business from H.V. Test, using the confidential
information
that was unlawfully obtained.
[35]
In substantiation of these averments:
35.1
H.V. Test attaches a number of email communications between Lombaard,
Sheik and Ledwaba in which
they deal with H.V. Test’s clients,
as reflected on their confidential customer lists, and requests to
Lombaard to quote
these clients. The glaring problem is that Sheik,
in so doing, cuts and pastes the information relating to the client
in the identical
format that it appears in H.V. Test’s client
lists to Lombaard and, also, in instances to Liz Wood (“Wood”),
an employee of Lead HV.
35.2 H.V
Test provides a schedule that reveals that by using information in
the follow up quotes lists,
Lead HV, via the conduit provided by
Sheik to Lombaard, in the main, and Ledwaba, to a lesser extent, was
able to access and follow
up and quote H.V. Test’s clients
which involved similar or identical product types, albeit that most
of the quotes post-dated
those of H.V. Test. The schedule titled the
“follow up quotes list” exposes, as an example, 23 of the
115 quotes uncovered
by the H.V. Test team, prepared and sent by Lead
HV and Lombaard to demonstrate that, using the regional lists and
accessing the
follow up quote lists, clients were induced to move
their business to Lead HV and new business was enabled.
35.3
H.V. Test attaches a number of email communications between Sheik,
Lombaard and Wood, which by
their express content and the attachments
shared by Sheik including the regional customer lists, training lists
inter alia, reveal
incontrovertibly, it is averred, the unlawful
competition contended for.
[36]
At the outset of the argument for H.V Test, I was enjoined to find
that Lombaard’s
credibility had been impugned in his affidavit.
It was submitted that Lombaard avers that Lead HV was incorporated on
13 October
2015 and did not commence trading until 1 May 2017.
However, one of the very quotes used by Lombaard demonstrates that
Lead HV
was in business and servicing clients, in this instance, Re
Dira Mmogo Contractors in June 2016 already. The email is dated 24
June 2016 and sent at 13:38 pm and evidences a request for a
quotation from Lombaard and Lead HV. Furthermore, it was submitted
to
me, this demonstrated that Moela who had signed a restraint
undertaking with H.V. Test had commenced the business in direct
competition with H.V. Test, in breach of his undertaking. As a
consequence, from its inception Lead HV’s conduct was tainted
as it was competing unlawfully.
[37]
This may be so, but of greater concern is Lombaard’s abject
failure to furnish relevant
and transparent information to the Court.
He makes no effort from the outset to explain and thereby disabuse
the Court of the adverse
inferences which must be drawn. He fails to
explain how Ledwaba and Sheik came to be employed by Lead H.V,
plucked as they were
from its direct competitor. He is silent about
whether he interviewed them, what reasons were furnished for the
termination of
their employ with its direct competitor, whether he
enquired as to whether Ledwaba and/or Sheik were bound by restraint
or non-disclosure
obligations, and if there were any impediments to
their employment. It is highly improbable that
bona fide
employers
would not canvass this essential information with them or call H.V.
Test to make sure that their employment was lawful.
Here, more so
because of Lombaard’s erstwhile relationship with H.V. Test, as
set out above. Yet, he did not do so.
[38]
The targeting and inducement of customers from H.V. Test began almost
immediately after
the employment of Ledwaba and Sheik, as appears
below.
THE
CLIENT LISTS
[39]
In a Lead HV quote, on 23 July 2020, Ledwaba sends a quotation for a
circuit breaker to
Re Dira Mmogo Contractors. H.V. Test had quoted
this very client for a circuit breaker on 19 July 2019. Lombaard
states that this
client has a “
history
” with Lead
HV. He attaches the email, emanating from Welma Rossouw of Re Dira
Mmogo Contractors to him, dated 24 June 2016,
and referred to above.
The 2016 email records that Lombaard had discussed equipment
requirements with Andrew Molamu, and a quote
is sought. This is the
identical client contact contained in H.V. Test’s customer list
and reflected in Ledwaba’s call
list of 2019, including details
of Molamu’s personal cell-phone number, email address and
product specification. Although
a year has elapsed since Lead
HV’s quote, there is no explanation provided by Lombaard as to
the expiration period of three
years prior its quote of 23 July 2020.
Having last quoted this client in 2016, Lombaard wants the court to
accept that Molamu has
ostensibly moved the business back to Lead HV.
An affidavit from Molamu is not proffered. To my mind, the timing of
the quote,
Ledwaba’s involvement, and the pilfering of
confidential information revealing that the client is in the market
for a circuit
braker sways the probabilities against such a finding.
[40]
In an email, on 22 July 2021 at 14:40, Lombaard quotes Lobhen. The
email is addressed to
Henry, refers to Ledwaba and attaches a quote
for three different models of instruments. In a training environment
list of 2019,
provided to Ledwaba by H.V Test, Lobhen is reflected as
one of Lead HV’s clients. The contact is Henry Lobhen whose
personal
cell phone number and email address are reflected as well.
In response, Lombaard says that Ledwaba had Lobhen’s cell phone
number, and he was contacted by Lobhen who requested the quote and
that there is nothing untoward in this conduct. Neither Ledwaba
nor
Lobhen file confirmatory affidavits. As such, this allegation has no
probative value, and is hearsay. Again, the timing of
the quote,
Ledwaba’s involvement, and the pilfering of confidential
information renders this finding improbable.
[41]
In an email sent by Lombaard to gladwin@ ___co.za, into which Ledwaba
is copied, dated
5 August 2020 at 18:01, he prepares and attaches a
quote for equipment. The email is titled “
22 KV VLF Pressure
Tester for commissioning and 22 KV Cable Fault Locator, Listening Set
and Scope
”. This client, Mbatini, is also listed in an H.V.
Test call list which was furnished to Ledwaba in 2019, whilst he was
employed
at H.V.Test. Gladwin is the contact, his personal contact
email address and cell phone number are reflected, so too that this
client
is a privately owned contractor in Gauteng. Lombaard
implausibly states that because Ledwaba is not an employee he had no
knowledge
of his database nor the information that he solicited.
Again, this superficial response does not explain why Lombaard,
knowing
what he does about Ledwaba’s prior employment, having
been employed at H.V. Test himself, does not explain why he never
discussed
Ledwaba’s ostensible client base with him and whether
or not this was a client he had solicited away from H.V. Test.
[42]
On 5
August 2020 at 18:10, Lombaard sends an email to
Rabbo Multi Solutions, into which Ledwaba is copied. The email,
authored by Lombaard,
is addressed to “
Sam
”. A
quotation is sent based on a discussion that Sam had with Ledwaba.
Once again, Ledwaba’s 2019 call list provides
that the contact
at Rabbo Multi Solutions is Sam Marota whose personal cell number and
email address are reflected and that the
business is privately owned.
Again, Lombaard says because Ledwaba is not an employee, he has no
basis or knowledge of his customer
base. This answer begs the
question because time and time again, emails are sent to identical
customers via identical confidential
contact persons. The link is
Ledwaba. As such, the only probable inference is that Lombaard was
well aware that Rabbo Multi Solutions
was a client of H.V. Test and
this confidential contact information was obtained for unlawful ends.
[43]
In an email sent by Lombaard to a client, Ampcor, titled “
Test
Equipment
”, on 6
August 2020 at 10:57, and into
which Ledwaba is copied, he attaches a quotation for instruments and
the email is addressed to Dirk
Neervoort, who is the identical client
contact on Ledwaba’s 2019 call list. Lead HV avers that this is
an established client.
The Lead HV quote list discloses only one
expired quote having been furnished on 31 March 2020. An email
reflecting a website query
dated 2 March 2020 is proffered. Notably,
the website query stems from a Renata Olivier and, yet, on 6 August
2020 the quotation
is sent to Neervoort, the confidential contact
person reflected in the H.V. Test’s client list. No explanation
is furnished
as to how and why Neervoort became the contact person
and not Olivier.
[44]
On 6 August 2020, at 02:33 pm, Sheik sends an email to Lombaard in
which she records that
a client needs a personal visit and that
“Daphney” has called for a representative to come through
and personally discuss
their requirements. Her suggestion is that
Ledwaba pay a visit. Pasted into the email is a rectangular block, an
extract of the
client’s details, which I am informed is an
identical replica of the client’s details contained in the
customer lists
in H.V. Test’s database. Extracts of H.V. Test’s
database were attached to the founding affidavit so that a comparison
could be made. The client list records that the client is Siyanda
Bakgatla Platinum Mine, the contact person is Daphney Rangaka
and her
personal email address and cell phone number are reflected. Having
received the email, Lombaard responds in an email to
Sheik and
Ledwaba at 14:44 pm. His email confirms to Sheik that Ledwaba can
speak to this client i.e. Daphney but he thinks that
Ledwaba has
already done so that morning because he had already mentioned
“
Siyanda
” to him. In the email he references
Ledwaba and asks him if this is the client that he was talking about.
This alone demonstrates
that this client is unknown to Lombaard and
Lead HV. Lombaard cannot and does not say that Siyanda Bakgatla
Platinum Mine is an
existing client, or even explain how Sheik or
Ledwaba had Daphney’s contact details. The contact person
earmarked in the
email is the very person that appears from the
confidential client listing belonging to H.V. Test, namely Daphney.
Instead, he
baldly avers that the inference that is sought to be
drawn, is uncertain. I disagree. Lombaard fails to explain whether
the client
approached Ledwaba or Sheik or they solicited her. His
version remains that he did not know what the source of Ledwaba and
Sheik’s
clients were. I have already stated this is highly
improbable, in the face of their prior employment. Belatedly, he says
that he
furnished them with existing clients to approach. Yet he does
not say that this was one of those clients on the evidence before
me.
[45]
A further example is a quote, dated 12 August 2020, to L H
Marthinusen, a division of Actom
(Pty) Ltd by Lead HV sourced through
Ledwaba, and which was found by the team in his g-mail account. The
quote is stipulated to
be for the calibration of a Baur DPA 75. The
follow up quotes listing prepared by H.V Test, which is part of its
confidential information,
reveals that it was to quote this very
client on upcoming calibrations, information which had been uploaded
in May 2018. In response,
Lombaard says that L H Marthinusen is an
existing client of Lead HV as they quoted and provided on - site
calibration services
to it on 1 April 2019. He furthermore says that
if one has regard to Lead HV’s customer quotes report it shows
that the relationship
commenced on 1 April 2019 and continued so that
on 26 August 2020 it repaired the Baur DPA 75 and did the
calibration. It’s
list reflects that a quote for calibration
raised on 6 March 2020 expired. It last invoiced this client in
September 2019 and in
December 2019. Unfortunately, Lombaard provides
no information as to how this quote arose i.e. who made first
contact, and how
Lead HV knew that the calibration was necessary –
not a shred of relevant evidence is placed before this Court. The
timing
of the quote coincides with the employment of Sheik and
Ledwaba and the fact that it was sourced by Ledwaba is glossed over.
Furthermore,
the confirmatory affidavit which Lombaard said was to be
furnished by L.H Marthinusen was not forthcoming. The failure to
produce
this affidavit after the lapse of some 5 months since the
urgent application calls for a negative inference to be drawn.
[46]
It was submitted to me by Ms Lombard that it is improbable, when one
has regard to the
fact that SOE’s, Municipalities and Mines
have thousands of employees that both Lead HV and H.V. Test, who are
direct competitors,
co-incidentally have a customer relationship
contact with the same person. I am inclined to agree with her. The
snowball effect
is my finding that Lombaard was well aware of the
fact that Ledwaba and Sheik was accessing confidential client lists
which were
the property of H.V. Test, and Lombaard was content for
them to do so.
[47]
These are not the only examples set out in the affidavits before the
Court but it is unnecessary
to canvass each one, as this evidence
with that dealt below suffices to assess the probabilities.
THE
FOLLOW UP QUOTES LIST
[48]
H.V. Test contends that during Sheik’s employment with Lead HV,
445 quotes were generated.
Of those 445 quotes some 115 quotes were
specifically generated by Sheik, on instructions from Lombaard. In so
doing she utilised
the follow up quote lists which comprise part of
its confidential information. A schedule was prepared by H.V. Test in
respect
of 23 of these quotes, by way of example, to provide evidence
that the follow up quotes in their list were also quoted upon by Lead
HV.
[49]
As submitted to me by Ms Lombard, Lombaard is silent as to how 7 out
of 22 of H.V. Test’s
existing clients, in this sample, clients
which he does not aver are existing clients, received quotes from
Lead HV after H.V Test
had provided quotes to them. These include
Electrical Substation Services on 1 September 2020 (two quotes for a
circuit breaker
and cables generated 10 months and 5 months
afterwards), MMM Consulting Engineers and Trading Investments on 7
August 2020 (a quote
generated 3 months afterwards), Power of 8 on 18
August 2020 (a quote generated 2 months afterwards), Bhendogu
Technologies on
28 August 2020 (a quote generated 2.5 months
afterwards) and a further quote on 30 August 2020, MGC Electrical
Works on 29 July
2020 (two quotes generated 1.5 months afterwards),
Beam Electrical Wholesalers on 16 July 2020 (a quote generated 3
weeks afterwards)
and Matuma Electrical and Projects on 16 July 2020
(a quote generated 3 weeks afterwards). No explanation is given as to
how these
clients came to contract with Lead HV. Instead, Lombard
says the delay in the quotes means that they are independent. To my
mind,
the so called delay in the generation of the quotes by Lead H.V
does not assist it, precisely because the timing of these quotes
coincides with the employment of Ledwaba and Sheik, who knew and had
access to the lists which contained a record of the quotes
that had
been furnished by H.V. Test.
[50]
A quote is furnished to CBI Electrical African Cables by H.V. Test on
23 June 2020. Lead
HV then quotes on 15 July 2020. Lombaard says that
this company was an existing client from 29 March 2019, referring to
a single
quote over this time period, which expired. He says that the
current quote emanated from a website query. In this regard one
Charlie
van Dyk made the enquiry. Yet, when the quote is furnished,
by Lombaard, it is furnished to Alwyn van Wyngaard. This is a
customer
contact contained in H.V.Test’s confidential customer
list.
[51]
So too, the quote to ARB Electrical Wholesalers, a client of H.V.
Test, who quoted it on
23 June 2020. Lombaard’s response is
that it’s quote was sent on 15 July 2020 and that ARB is an
existing client. This
quote was sent 2 days after Sheik commenced her
employ. Lead HV first invoiced them on 23 July 2018. The Lead HV
quotes list shows
a number of unsuccessful quotes on 1 August 2018,
two on 11 October 2018, one on 4 September 2019 and, finally one on
15 July 2019.
He further contends that because ARB is an electrical
wholesaler they shop around for the best prices. Lombaard is again
untruthful,
as his version directly contradicts an email which was
sent by Sheik to Lombaard on 15 July 2020, where she is soliciting
business
from ARB. The email is sent to Lombaard and Wood at 8:13 am.
In that email titled “
15
th
of July
2020 – Plan of action for today
” Sheik records the
following:
“
NB: Barry if you need those
contacts for calibration, please let me know. I will work on that
list. NB: Liz are we a vendor of ABB,
if we are please kindly let me
know, I have spoken to a contact of mine at ABB yesterday and if we
are a vendor he will have no
issues giving us the business in
future.”
[52]
This is further embroidered upon when Sheik sends a second email on
the same day, at 08:44
am, to Wood and Lombaard. Quoting from that
email she says:
“
I will inform the client.
He had just purchased a unit recently (CAT35).
Should he need more test equipment
moving forward, he will definitely consider us.”
[53]
The contact knowledge and product knowledge, i.e. that ARB had
purchased a CAT from H.V.
Test emanated from Sheik’s knowledge
that a CAT35 had been sold by H.V.Test to ARB, on 13 May 2020, as
reflected in an invoice
furnished to the Court. Lombaard glosses over
this. The only inference to be drawn is that Lombaard and Wood knew
full well that
Sheik obtained this knowledge whilst in H.V. Test’s
employ. In this regard this client is interchangeable referred to as
ABB and ARB but from the submissions made it is the same client.
[54]
Lombaard says that the quote given to MMM Consulting Engineers and
Trading Investments
resulted because the customer approached Lead HV
directly i.e. Rumani Nekhumbe of the client. H.V. Test’s quote
is dated
5 May 2020. Yet, there is no explanation why on 6 August
2020, the quote is furnished to Manas Maponkola, accompanied by an
email
from Lombaard addressed to him, and who is the client contact
in H.V. Test’s confidential client list.
[55]
On 11 May 2020 H.V. Test quoted Power of 8. In defence of the quote
given to Power of 8
on 18
August 2020 by Lead HV, Lombaard
says that the inference sought to be drawn is improper because its
quote was higher and it had
no knowledge of the H.V. Test quote and
no business resulted. This is not completely true. In an email from
Sheik to Lombaard about
this client, on 18 August 2020 at 4:35 pm,
she informs Lombaard as follows:
“
FYI – H.V. Test also
quoted him but he did not have the quote in front of him to tell me
the amount quoted and he could not
remember because I did ask him.”
[56]
The email is titled “
Quotation – Cable Fault Location
System
”. Lombaard then proceeds to quote and addresses the
quote to kennedy@_.co.za, the contact person referred to in H.V.
Test’s
confidential client lists. This transaction
unequivocally demonstrates that Lombaard was aware that Sheik was
contacting H.V.Test’s
clients and trying to ascertain from them
what prices had been quoted in an effort to solicit their clients,
undercut the prices
and in so doing compete unlawfully. The business
did not eventuate simply because, without the pricing information,
Lombaard was
unable to offer a competitive quote. It also
demonstrates that Lombaard is untruthful in his explanation. He had
no knowledge of
the H.V. Test quote because Sheik could not solicit
this information for him from the potential client.
[57]
I have not dealt with all the examples, in the schedule. Again, it is
unnecessary for me
to do so as set out above.
[58]
As submitted to me, the follow up quotes list was “
the
proverbial low hanging fruit
” targeted by Lead HV
immediately upon the employment of Ledwaba and Sheik and the
responses furnished by Lombaard to the
assertions made lack substance
and are implausible. The evidence exposes the truth that Lombaard and
Lead HV were well aware that
the follow up quotes list existed and
they instructed Sheik to target the clients on that list to benefit
Lead HV permitting Lombaard
to quote and, in so doing, dishonestly
and unlawfully compete with H.V. Test.
THE
EMAIL EVIDENCE OF THE SHARING OF THE CONFIDENTIAL INFORMATION
[59]
Ms Lombard in her argument sought to highlight what she contended was
direct and incontrovertible
evidence of the unlawful activity
displayed and conducted between Lead HV, Lombaard, Wood and Sheik.
[60]
An email reflects that the customer list for KZN 2020 is sent to
Lombaard, on 13 July 2020
already, by Sheik with an undertaking that
other area lists will be emailed to him the following day. The KZN
customer list 2020
contains 97 customers all of which are customers
of H.V. Test. It is in the context of preparing the KZN list that the
email referred
to above titled “
15
th
July 2020 – Plan of action for today
” is sent to
Lombaard. In a further email sent to Lombaard and Wood by Sheik, on
17 July 2020 at 8:12, and titled “
Plan for today –
17
th
of July 2020
”, Sheik confirms
that a few quotes and enquiries were received from those customers on
the KZN customer list and furthermore
that she will now follow up on
quotes that went out that week. In addition, she says she is working
on her next target area which
is Cape Town.
[61]
In an email to Wood and Lombaard, on 22 July 2020, titled “
Plan
for today – 22
nd
of July 2020
”,
Sheik confirms to them that she will continue making calls using the
Cape Town listing, her main focus being contact with
municipalities,
whereafter she will try and work through the list systematically. She
attaches her current working list saying
that there are still a lot
of calls that need to be made but that she is hoping to complete the
list by the next day whereupon
she will then focus on her next target
area. She then furnishes the completed customer list for Cape Town
and her updated “
follow up list
” which is sent as
an attachment to Wood and Lombaard in an email, dated 24 July 2020 at
1:16 pm, the subject-matter being
“Weekly report update on
customer and quote follow up”.
[62]
The Mpumalanga list is sent to Lombaard, on 29 July 2020 at 4:05 pm,
in an email titled
“
List for Mpumalanga
”. In this
email she informs Lombaard that she has pulled these contacts from
various different spreadsheets and requests
authorisation that she
can start working on it. She furthermore states:
“
I do have a few more
contacts, I just need to find them in my diary and my other
spreadsheets.”
Lombaard
responds to the email at 8:43 am, on 30 July 2020, wherein he
confirms that she can work on the lists.
[63]
There is an email containing the Limpopo list, which is forwarded by
Sheik to Lombaard,
on 4 August 2020 at 12:06 pm. She wants
authorisation to now work on the Gauteng listing. Lombaard responds
in the affirmative,
that she may continue.
[64]
In an email titled “
Working list for Gauteng
”,
dated 4 August 2020 at 2:38 pm, the list is shared by Sheik with
Lombaard. She informs him that it took her a bit more
time but that
she has “so many other leads I need to compile on a
spreadsheet”. She asks for the go ahead in respect
of the
attached list. In response, Lombaard on 5 August 2020 at 8 am says:
“
There are a lot we are
currently servicing but you can still make contact from a sales
angle. I see Aldorette from H.V. Test is
on there … please
leave that one out. …”
[65]
This email exposes Lombaard who clearly knows that this list is from
H.V. Test and wants
to make sure that Aldorette is not targeted with
marketing material, because the “
game will be up
”.
In addition, this emphatically reveals that although there was an
overlap of clients, not all clients were in Lead HV’s
stable.
[66]
In an email, dated 19 August 2020 and sent at 4:08 pm, by Sheik to
Lombaard. The subject-matter
is training list contacts and to which
Sheik attached a training list of contacts, a list which she has
coped from H.V. Test’s
database. She records in the email that
the list may have a few duplicates from other area listings she has
completed but that
there is no harm in making contact with these
clients again. Importantly, she tells Lombaard that she has another
training list
that consists of over 1500 clients that she needs to go
through before she sends it to him. Lombaard lamely contends that he
had
no knowledge where Sheik got these leads and at the end of the
day the email was simply a progress report. He further suggests,
without any proof, that he assumed that she was cold calling. This is
completely untenable. Sheik’s email suggests that she
has
contacted these clients previously. Furthermore, in a competitive
market, it appears that she has clients at her fingertips
and yet
Lombaard wants this Court to ignore his failure to question where
these clients were sourced. Ineluctably, the only possible
inference
is that he knew full well that these client lists and training lists
were obtained by Sheik from H.V. Test. He was careless
as to the
consequences of using these lists in the furtherance of unlawful
ends.
[67]
On 21 August 2020 at 8:19 am, Sheik sends another email to Lombaard
and Wood. The subject
of the email is “
Plan for today –
21 August 2020
”. In the email she records that she will
focus on all quote follow ups and will continue with the attached
list, the training
list contacts.
[68]
She says this may take a bit of time to complete and that there is
over 500 contacts. She
confirms that once she has completed her
“follow up list” she will send an update. These
statements, in the context
of the information disclosed in the
attached lists, and the speed with which these lists were being
produced together with the
volume of contacts, is a further
indication that Lombaard knew full well that the attached listing was
not drawn from leads or
cold calling, but had been filched from H.V.
Test.
[69]
On 28 August 2020 at 8:21 am, Sheik sends an email to Wood and
Lombaard. The subject of
the email is “
Plan for today –
28 August 2020
”. Attached to this email, Sheik provides a
completed listing and confirms that there were a few enquiries and
quote requests.
What is revealing is that she records the following:
“
NB: Over 375 (x 2)
individual emails sent out of which 23 bounced back – will
focus on getting in contact with these clients
first thing on Monday.
Today I will focus on all quote
follow ups and I will try and send out as many emails in terms of our
promotional product –
MD9880 TRMS Thermal Multimeter.”
That
Lead HV, Lombaard and Sheik are targeting H.V. Test’s clients
is incontrovertible.
[70]
As promised, in the email of 28 August 2020 sent at 8:21 am, Sheik
then proceeds to send
out the promotional products email. This email
includes a generic budget quote for Lead HV’s thermal
multimeter, of which
five units are held in stock, together with a
description of the multimeter and its specifications, which H.V. Test
discovers were
sent to 750 contacts. All of these 750 contacts
emanated from the KZN training list contacts file, which was the
property of H.V.
Test, and which had been filched by Sheik and used
by her in furtherance of the business of Lead HV.
[71]
In a further email from Sheik to Wood and Lombaard, on 14 September
2020 at 8:27 am, the
subject-matter of which is “
Plan for
today – 14 September 2020
” she records the following:
“
I will continue with the
“training” listing making calls and marketing our
multimeter … I have attached the listing
for you to view my
progress thus far.”
to
which is attached the training list of contacts.
[72]
To suggest, in the face of the volume of clients Sheik was targeting
that Lombaard innocently
assumed that she was cold calling or had her
own ostensible client base is patently improbable. It is also
implausible that Sheik
could remember all of these clients from
memory together with their personal contact information, training and
other information,
without having obtained lists nefariously from
H.V. Test. Lombaard, at the very least would have been suspicious,
yet he fails
to address this and sweepingly contends that he did not
know. In truth, on the probabilities he was well aware of the source
of
Sheik’s client base and was happy to accede to her unlawful
conduct, in which he too participated.
[73]
This training list of contacts that Sheik created is from a file
named KZNCRM 31.10.2019.xls
(the training contacts file) which the
Court is informed is part of H.V. Test’s database and
specifically includes a file
named data/Ameera/documents/copy of
KZNCRM 31.10.2019 training.xls which was found on the laptop issued
to her by Lead HV. The
training list file had been given to Sheik by
her fellow employee, Kloppers, on 18 November 2019, whilst in
H.V.Test’s employ.
[74]
In an email sent, on 18 November 2019 at 4:09 pm, by Kloppers to
Sheik, the subject-matter
is recorded as “
KZN CRM
31.10.2019.xlsx
”. The email attaches the KZN training list
file. Kloppers informs Sheik that there are a lot of columns that she
does not
require and that a few have been hidden. Sheik is required
to verify the details on the list and to update where it is
incomplete
or inaccurate. She is further required to use the list
with a training focus. These lists in a comments column set out the
calls
made to set up the training, the training requirements and the
training quotes
inter alia
. All of this information is clearly
of a confidential nature which Sheik pilfered and openly shared with
Lombaard and Wood.
[75]
To the extent that Lombaard variously contends that Sheik was cold
calling, yet at the
same time had her own leads, or that he had given
her potential clients to follow up, he fails to substantiate these
conclusions.
THE
LOMBAARD QUOTES AND EMAILS
[76]
Materially, there are a number of further emails exchanged between
Lombaard and Sheik which
incontrovertibly disclose that he was a
party to the unlawful enterprise. These emails were disclosed as
evidence of Lombaard’s
complicity in the unlawful enterprise. I
deal with certain of them.
[77]
In an email, on 12 August 2020 at 3:28 pm, Sheik informs Lombaard:
“
As per telecom, kindly
contact ‘Speedy’ tomorrow at 10 am. His[sic] not happy
currently with H.V. Test – has a
Test Van at H.V. Test and is
very upset with Sean at present.”
[78]
The reference to Sean is clearly to the deponent to the founding
affidavit. This email
includes the pasted extract of the client
contact, which is the property of H.V. Test.
[79]
On 7 September 2020 at 12:22 pm, Sheik sends a follow up email to
Lombaard for a prospective
client, F&J Electrical. In this email
which is titled “
Feedback from Speedy – F&J
Electrica
l” she records:
“
I called Speedy. This was
his feedback: Giving H.V. TEST until this Wednesday to sort out his
trailer and if nothing is done, the
business will come our way. He
also mentioned he needs another trailer in the near future. Will
support us.”
[80]
Copied into the email is the client’s details in the format in
which it is kept in
H.V. Test’s client list database. It refers
to the name of the client, the contact person, his nickname, his
private cell
phone number and email details.
[81]
In response, Lombaard weakly asserts again that he does not
know where Sheik got
her leads, he did not encourage her to draw
information from H.V. Test, that the correspondence is simply a
progress report and
that he assumed she was cold calling. This
response completely contradicts and spins the contents of the email
exchange and does
not support such an interpretation. The exchange
unequivocally shows that the client was not Lead HV’s, that
using the customer
contact list it had access to the responsible
person, and that an attempt had been made to solicit this clients
business and divert
it away from H.V. Test.
[82]
In a further email, dated 12 August 2020 at 10:50 am, and titled
“Future potential
clients” Sheik informs Lombaard:
“
Please could you kindly try
and contact Theo tomorrow at around 9 am. This client did have a
small budget when I last spoke to him
at H.V. Test. He is currently
in a financial situation and had to let his staff go.
He is interested in test equipment
for Cable Faults. If we can assist him with a quote at the best
possible price and give him guidance
as to what test equipment he
needs, I am certain when his finances improve he will give us the
business.”
Sheik
pasted into the email the client information, the contact, his
personal email address and cell phone number – information
which she had sourced from H.V. Test’s client list. Once again,
the probabilities point to Lead HV soliciting clients from
H.V. Test
using confidential information obtained during Sheik’s
erstwhile employment.
[83]
All of these emails indicate that in employing Sheik and Ledwaba,
Lombaard and Lead HV
unequivocally knew that they had access to
confidential information in the form of client lists, follow up
quotes and training
lists, which had been unlawfully obtained. These
lists would be shared with Lead HV who would then utilise these lists
to target
and induce customers which it did not or used to have, and
were placing their business with H.V Test, and in so doing unlawfully
competed with H.V. Test.
[84]
In the face of these email exchanges and comprehensive sharing of
confidential information
in the lists shared with Lombaard and Wood,
on occasion, it is unsurprising that Lombaard makes sweeping
statements and provides
no detail or assistance to the court to
counter the inferences made against him and Lead HV. He receives the
lists and then actions
Sheik’s unlawful activities by allowing
her to make contact with the clients sourced from the lists
simultaneously engaging
with them by sending quotes to them.
THE
LAW
[85]
In
considering the evidence placed before me and in view of the fact
that the order that is sought is final in nature, such an order
can
only be granted on the basis set out in
Plascon-Evans
Ltd v Van Riebeeck Paints (Pty) Ltd
[5]
and
National
Director of Public Prosecutions v Zuma.
[6]
Furthermore as set out in
Fakie
NO v CCII Systems (Pty) Ltd
[7]
Cameron JA, set out the test for resolving genuine or bona fide
factual disputes. He said as follows:
“
Motion proceedings are
quicker and cheaper than trial proceedings and, in the interests of
justice, courts have been at pains not
to permit unvirtuous
respondents to shelter behind patently implausible affidavit versions
or bald denials. This means that an
uncreditworthy denial, or a
palpably implausible version, can be rejected out of hand, without
recourse or oral evidence
.”
[86]
To my mind there are no material disputes of fact, it was certainly
not raised in argument
before me, which would not justify a final
interdict.
[87]
As set out
in
Van
Castricum v Theunissen
:
[8]
“
The essential elements to
be proved to protect confidential information by way of an interdict
are:
(i)
the applicant must have an interest in the confidential
information;
(ii)
the information must be of a confidential nature;
(iii)
the relationship must exist between the parties which imposes a duty
on the respondents
to preserve the confidentiality;
(iv)
the respondents must have knowledge of the confidentiality of the
information and its value;
and
(v)
improper use must not be made of the information concerned.”
[88]
Furthermore, in that judgment it was held that:
“
To be confidential, the
information must have the necessary quality of confidence about it,
namely it must not be something which
is public policy or public
knowledge.” See Atlas Organic Fertilizer (Pty) Ltd v Pikkewyn
Ghwano (Pty) Ltd and Others
1981 (2) SA 173
(T) at 185. In Saltman
Engineering Co Ltd v Campbell Engineering Co Ltd
[1948] 65 RPC 203
(CA) at 211 Lord Green MR also said the following: ‘What is
clear from the aforesaid, is that someone who saves himself the
trouble of going through the process of compilation of the document,
even where it is compiled from information which is available
to
anybody, such a person would be interdicted if that information has
been obtained in confidence. The reason is simply that the
confidential information may not be used as a springboard for
activities detrimental to the person who made the confidential
information
available. It would remain a springboard even when all
the features have been published or can be ascertained by actual
inspection
by any member of the public.’ See Cranleigh
Precision Engineering Ltd v Bryant
[1965] 1 WLR 1293
(QB) at 1317-8
[1964] 3 ALL ER 289)
, quoted in the Harvey Tiling case supra at
324B-D. It is sometimes difficult to draw a dividing line between
information which
constitutes general knowledge and information which
is confidential or constitutes a trade secret. It seems that the four
principles
enunciated in the following English authority are of great
assistance in discerning whether information constitutes confidential
information or a trade secret worthy of protection: …
First, I think that the information
must be information the release of which the owner believes would be
injurious to him or of
advantage to his rivals or others. Second, I
think that the owner must believe that the information is
confidential or secret,
i.e. that it is not already in the public
domain. It may be that some or all of his rivals already have the
information: but as
long as the owner believes it to be confidential
I think he is entitled to try and protect it. Third, I think that the
owner’s
belief under the two previous heads must be reasonable.
Fourth, I think that the information must be judged in the light of
the
usage and practices of the particular industry or trade
concerned. It may be that information which does not satisfy all
these
requirements may be entitled to protection as confidential
information or trade secrets: but I think that any information which
does satisfy them must be of a type which is entitled to protection.”
[89]
The evidence before me demonstrates that:
89.1
H.V. Test clearly had an interest in the confidential information
which they
had built up over many years and which they sought to
protect by having Ledwaba and Sheik, sign their necessary restraints
and
non-disclosure agreements and ensuring that all of the electronic
equipment on which the lists were stored were returned to them
on the
termination of their employ;
89.2
Ledwaba and Sheik were immediately employed by Lead H.V, a direct
competitor,
and in breach of their agreements, in circumstances where
Lombaard permitted and aided the use of the confidential information,
irrespective of the consequences;
89.3
The
information in respect of the client lists which included the clients
names, personal contact details including cell phone numbers
and
telephone numbers, and email addresses, the training lists and the
follow up quote lists are all integral to H.V. Test’s
business
and gave them a clear advantage when competing in this industry, and
is information which is worthy of protection as confidential
information. In
Aercrete
South Africa (Pty) Ltd and Another v Skema Engineering Co (Pty) Ltd
and Others
[9]
it unequivocally provides that it is unlawful for an employee to take
his employer’s confidential information or documents
and use
them to compete with his employer. This also applies to former
employees.
[90]
This
information was obtained by Lombaard and Lead HV, in circumstances
where they were direct competitors and which was obviously
confidential. Knowing its true nature, and value, they exploited the
information and used it “as a springboard” to
pilfer
clients, sell instruments, quote, undercut prices and provide follow
up services and calibrations, thereby nefariously and
unlawfully
competing with H.V. Test. I am of the view that they should be
restrained from continuing with this unlawful conduct.
[10]
ONGOING
HARM
[91]
Mr Labuschagne, correctly in my view, did not seek to dispute and
downplay the conduct
of Lombaard and Lead HV, which is palpably
dishonest.
[92]
He instead raised two legal points. The first was that H.V. Test had
not demonstrated that
the harm was ongoing and that the interdict was
necessary in the absence of such harm.
[93]
Prior to the institution of these proceedings, an undertaking was
sought from Lead HV.
It chose not to give any undertaking, in the
face of what was viewed as the wide and unjustifiable undertaking
sought. It pressed
H.V. Test to stipulate the exact terms of the
undertaking. H.V. Test, at that point in time, did not have all of
the information
at its disposal, which Lead HV and Lombaard must have
appreciated. They were not bona fide, as is evidenced by the conduct
which
has been exposed in the application. H.V.Test had no other
alternative but to pursue their legal avenues.
[94]
In the face of the Anton Piller order and its execution, Lead HV and
Lombaard sought to
distance themselves from Sheik and terminated her
employ. This appears to be strategic. The Anton Piller relief and the
documents
obtained, disclosed that the confidential information was
found on Lead HV’s computer systems and was in their
possession.
There is direct evidence that this information was
forwarded to them by Sheik. Yet, they still chose not to give any
undertakings
and delete the information, in their unlawful
possession. I am not told that this information has ever been
deleted.
[95]
It is clear that Lombaard and Lead HV demonstrated a disregard for
H.V. Test’s rights
by using confidential information, and
unfairly and wrongfully took advantage of information that was
protectible. There is no
suggestion that this has stopped. Lombaard
has the lists and he personally made contact with the filched clients
and provided quotes
to them. I can see no reason why the interdictory
relief sought is not as necessary now as when it was sought urgently.
To suggest
that because no evidence of unlawful competition has been
produced, since the granting of the urgent interdict, does not carry
weight with this Court. It is extremely difficult for H.V. Test to
determine whether or not its confidential information is still
being
used to its detriment. Clients are unlikely to disclose that they
were approached by Lead HV and diverted their business
to it, a
competitor. The information is usually stumbled upon. H.V. Test was
only able to glean this information, which is uniquely
in the hands
of Lead HV, by way of the Anton Piller order. Unless a client freely
approaches it with information, it cannot be
expected to comb its
marketplace and pester its clients. In these circumstances, my view
is that the harm is ongoing and an interdict
is the only remedy to
stem potential harm. Without an interdict, Lead HV is permitted to
continue with its unlawful conduct and
this cannot be allowed.
THE
INFORMATION HAS LOST ITS CONFIDENTIALITY
[96]
Mr
Labuschagne’s second point was that the information has lost
its confidentiality. He referred me to a decision South African
Airways SOC v BDFM Publishers and Others
[11]
in which Sutherland J was seized with an interdict sought against the
distribution of privileged information which had found its
way into a
number of media outlets. He found that it had, as a consequence, lost
its confidentiality, more particularly because
the information was
digitally stored, and interdictory relief would not be effective.
[97]
I am of the view that this matter is distinguishable on the facts.
Here, the confidential
information, stored digitally, was solicited
and acquired by Lead HV through its employment of two erstwhile
employees of H.V.
Test. This information has not been distributed and
disclosed widely into the marketplace. H.V. Test immediately acted
and launched
the Anton Piller relief. Having done so, Ledwaba and
Sheik did not oppose the interdictory relief sought, which also
required them
to hand over any information, however stored, within
their control. This only leaves Lead HV and Lombaard in the picture.
In the
face of the relief sought Lead HV and Lombaard are required to
delete this information which they uniquely acquired in order to
compete unlawfully. If they do so, as they must do, the information
and its confidentiality are preserved. The interdictory relief
will
prevent them from acting on the information. This is not a situation
where “humpty dumpty cannot be put back together
again”.
NO
OTHER REMEDY
[98]
In the light of my findings, I am of the view that there is no
alternative remedy to protect
H.V. Test’s goodwill and that the
interdictory relief is the only manner in which to do so, as set out
above.
COSTS
ON THE ATTORNEY CLIENT SCALE
[99]
Costs are sought on the attorney client scale. Such an order is
granted in circumstances
where the Court seeks to mark its
disapproval at the conduct of the losing party. Special grounds have
to be present, one of which
is the element of dishonesty or fraud and
motives to that end. A punitive costs order was granted against
Ledwaba and Sheik. In
my view, the affidavits disclose that Lombaard
and Lead HV acted in concert with Ledwaba and Sheik. Lombaard’s
affidavit
exposes that he has been dishonest, despite his oath and
that his and Lead HV’s actions were unscrupulous. The incidents
of unlawful competition are not isolated in nature and it has been
demonstrated that a comprehensive attack against H.V. Test’s
client base and services was planned and carried out and at the
centre of this was Lombaard and Lead HV.
[100]
In all of the circumstances, the Court cannot condone such unlawful
conduct and it is fitting that costs
be awarded jointly and severally
against Lead HV and Lombaard on an attorney client scale.
CONSIDERING
THE AMENDED RELIEF SOUGHT
[101]
I have considered the draft order. I am not inclined to grant the
relief:
101.1 compelling Lead H.V
and Lombaard to disclose the details of any person, close
corporation, partnership or company
to whom they have disclosed the
applicant’s confidential information. There is no evidence that
they have done so. It is
clear that Ledwaba and Sheik unlawfully
obtained the confidential information and disclosed it to them.
101.2 permitting nominated
IT professionals to access electronic devices, memory sticks and hard
drives, as this would
constitute an unwarranted invasion of Lead HV’s
privacy in circumstances where it is a direct competitor and also has
confidential
information. If the unlawful competition continues in
breach of the order, they will face contempt proceedings and a
sanction will
follow.
[102]
In the circumstances, I make an order as follows:
102.1
The first and fourth respondents are interdicted and/or restrained
from:
102.1.1
utilising, communicating or publicising any of the applicant’s
confidential information comprising
of the applicant’s:
(a)
customer lists;
(b)
training lists; and
(c)
follow quotes lists,
(“the confidential
information”);
102.1.2
utilising or publicising customer contact details of persons with
whom the applicant deals;
102.1.3
approaching directly or indirectly (or assisting any other person in
approaching directly or indirectly,
any customer or employee of the
applicant in order to unlawfully compete with the applicant, for
their benefit or the benefit of
any other person in respect of any
contract with which the applicant has tendered, bid or was
negotiating at any time up to and
including 13 November 2020;
102.1.4
accessing or utilising the confidential information which has come
into their possession in consequence
of their employment of the
second and third respondents.
102.2 Ordering Lead HV to
disclose, with sufficient particularity, the details of any person,
close corporation, company
or partnership with whom they have
attempted or have conducted business utilising the confidential
information.
102.3 Ordering the first
and fourth respondents to dispose, delete and destroy the applicant’s
confidential information,
however stored, and to inform the applicant
that they have done so within 10 (ten) days of this order.
102.4 Ordering the first
and fourth respondents to pay the costs of this application on the
attorney and client scale,
jointly and severally, the one paying the
other to be absolved.
P V TERNENT
Acting
Judge of the High Court of South Africa
DATE
OF JUDGMENT
: 12 August 2021 handed
down electronically uploaded to CaseLines and emailed to the parties
DATE
OF HEARING
:
14 April 2020 (heard on the virtual Teams platform)
APPEARANCES
:
For Applicant : Ms N
Lombard
Instructed by C Van Zyl
Johnson Attorneys
C Johnson
For Respondents:
Mr F J Labuschagne
Instructed by E Y Stuart
Inc.
Mr L A Stuart
[1]
Annexure “
FA41”
,
pages 002-24 to 002-32
[2]
Schultz
v Butt
1985
(3) SA 667
(A) at 678G and 678H-679E
[3]
1981 (2) SA 173
(T) at 182D-E
[4]
1968 (1) SA 209 (C)
[5]
[1984] ZASCA 51
;
1984 (3) SA 623
(AD)
[6]
[2009] ZASCA 1
;
2009 (2) SA 277
(SCA) at paragraph 20
[7]
2006 (4) SA 326 (SCA)
[8]
1993 (2) SA 7251
at 732
[9]
1984 (4) SA 814
(D) at 822E-G
[10]
Dun
and Bradstreet (Pty) Ltd v SA Merchants Combined Credit Bureau
(Cape) (Pty) Ltd
1968
(1) SA 209 (C)
[11]
2016 (2) SA 561
(GJ)