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[2021] ZANCHC 52
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Kuruman Radiators CC v Donovan and Another (1283/2021) [2021] ZANCHC 52 (17 September 2021)
IN
THE HIGH COURT OF SOUTH AFRICA
NORTHERN
CAPE DIVISION, KIMBERLEY
Case
No: 1283/2021
Heard:
20/08/2021
Delivered:
17/09/2021
Reportable:
YES/NO
Circulate
to Judges: YES/NO
Circulate
to Magistrates: YES/NO
Circulate
to Regional Magistrates: YES/NO
In
the matter between:
KURUMAN
RADIATORS
CC
Applicant
and
DEBBIE
O'
DONOVAN
First Respondent
BSSC
RADIATORS
(PTY)
LTD
Second Respondent
JUDGMENT
Mamosebo
J
[1]
This application came before me as a return date of a rule
nisi
granted on 29 June 2021 in respect of an urgent application
brought by the applicant, Kuruman Radiators CC, in which it sought to
enforce a restraint of trade covenant against the first respondent,
Ms Debbie O'Donovan, and the second respondent, BSSC Radiators
(Pty)
Ltd.
[2]
Lever AJ granted the rule
nisi
on 29 June 2021 on an
ex
parte
and urgent basis on these terms in relevant part:
"1.
The
respondents are
called up
to
show cause, if
any, on
20
August 2021
at
09:30
why
the
following
order
should
not issue:
1.1
That the first respondent be interdicted and
prohibited, for a period of 18 months from 1 June 2021, and within a
radius of 200km
from Kuruman, to accept and hold any employment with
any person, firm, group, partnership or association whatsoever,
including
the second respondent which directly or indirectly competes
with the business of the applicant and/or carries on a
business similar
to
that of the
applicant;
1.2
That the first respondent be interdicted and prohibited
from performing any of her duties of her employment with the second
respondent
during the period and within the area as stated in the
preceding
paragraph;
1.3
That the first respondent be interdicted and prohibited
from directly or indirectly disclosing any confidential information
or other
facts with respect of the business of the applicant, to any
other person or business, including the second
respondent;
1.4
That the first and second respondents be ordered to pay
the costs of this application, to be determined on the return date or
extended
return day of this application, jointly and severally, the
one paying the other to be absolved
pro tanto.
2.
Pending the final determination of this application:
2.1
The first respondent is interdicted and prohibited from
performing any of her duties in terms of her employment
with
the second respondent in respect of any clients operating
within a radius of 200km from Kuruman;
2.2
The first respondent is interdicted and prohibited from directly
or indirectly disclosing any confidential information in respect
of
the business of the applicant, to any other person or business,
including the second respondent."
[3]
The matter came before me on the return date of 20 August 2021. On
the
issue of urgency, I hold the view that the applicant had to
persuade the Court on urgency first when Lever AJ considered the
application
before the interim order was granted. Even more
importantly, is that the respondents were subsequently afforded the
opportunity
to file opposing papers and to fully prepare their cases
before the matter was finally determined. This eliminates prejudice
on
either party to present its case. I deem it unnecessary to
entertain the issue any further. I therefore proceed to deal with the
merits of the application.
[4]
The issues for determination are the following:
4.1
Whether the applicant has proven the existence of a restraint
of trade and, if so, has it been infringed?
4.2
Whether the first respondent has shown that the enforcement of
the agreement would be unreasonable and contrary to public policy;
4.3
Whether the proprietary interest contended for by the
applicant weighed against first respondent's rights is sufficient to
render
her unemployed;
4.4
Whether the first respondent can be characterised as a
competitor of the applicant and to what degree.
[5]
It is common cause between the parties that there are disputes of
fact. The correct
approach to be adopted has been articulated in
Plascon-Evans
Paints Ltd v Van Riebeeck Paints (Pty) Ltd
[1]
.
The
Rule
holds
that when factual disputes arise in circumstances where the applicant
seeks final relief, a final order can be granted in
favour of the
applicant
only
if
the
applicant's
averments,
admitted
by the
respondent, together with the facts alleged by the respondent
justifies
such
an order.
[6]
Now the background facts. The applicant employed the first
respondent on 26 October 2015 as a Sales and Office Assistant. Two
years
later, and in July 2017, she was promoted to the position of
Sales Manager. Her contract of employment is marked "KR1".
Due to an unfortunate incident involving another employee divulging
confidential information of the applicant to a competitor in
2019, a
decision was taken for all employees to enter into a confidentiality
and restraint of trade agreement. The applicant concluded
this
agreement marked "KR2" with the first respondent on 30 July
2019.
[7]
The relevant terms of the confidentiality and restraint of
trade agreement reads:
"2.1
In consideration of the benefits accruing to the employee in terms of
this agreement and in the interest of the protection
and maintenance
of the employer's confidential information, the employee undertakes
to the employer that:
2.1.1.a)
He shall not during his employment by the employer or
at any time thereafter, either himself
utilise and/or
directly or indirectly divulge and/or disclose to any third party
(except as required by
the terms and nature of the
employee's appointment/employment with the employer)
any
of the employer's confidential information.
2.1.1.b)
RESTRICTIOS. The employee undertakes that he/she shall
not, at any time during his/her employment and for a period of 72
months
from the termination date of this contract ("Termination
Date"), directly or indirectly engage in any business in the
geographical area
(Northern Cape) in competition
(direct competitors) with the company and this industry (Radiators
and Battery Specialists)."
[8]
The founding papers do not specify the exact dates but merely
state that about nine months ago the first respondent gave the
applicant
verbal notice of resignation and took up employment with a
company IST Hadco, a supplier of general mining supplies. This aspect
is not in dispute. However, the applicant qualifies this employment
by adding in its founding papers that IST Hadco is not its
competitor. The first respondent took up employment with the second
respondent on 01 June 2021 but the date on which second respondent
made her an offer of employment is not specified.
[9]
On 04 June 2021 the first respondent sent a whatsapp message
to Mr Christian Matthys Grobler, managing member of the applicant and
deponent to the founding affidavit, that second respondent appointed
her as Area Sales Manager. The whatsapp message, "KR3,"
reads:
"More
Carine, Naledi, Christian. Ek wit Jul net, uit respek vir Julle,
sodat ju/le dit nie deur ander monde en stories hoef
te hoar, laat
weet dat ek het 'n baie goeie werksaanbod en pakket by BSSC Radiators
gekry as Area Sales Manager. Ek het dit aanvaar.
Op my ouderdom om so
geleentheid te weier sat baie onnosel wees. Nou kan ek weer my kennis
en dit waarin ek goed is, ten volle
benut. Dit is 'n
besigheidsbesluit wat vir ons gesin baie goed is en baie deure
oopmaak. Ek glo Jul verstaan." (Loosely translated:
Morning
Carine, Naledi, Christian. I Just want to inform you, out of respect
for you, to avoid to hear it through the grapevine,
that I got a very
good job offer and package from BSSC Radiators as Area Sales Manager.
I accepted it. At my age to refuse such
an opportunity would be very
foolish. This will enable me to fully utilize my knowledge and
abilities. This is a business decision
that is advantageous for our
family and opens many doors. I trust that you will understand).
[10]
On 10 June 2021, Mr F Engelbrecht ("Engelbrecht") of
the firm Engelsman Magabane Inc, on the instructions of Mr Grobler,
addressed a letter of demand, marked "KR4", to the first
respondent affording her opportunity to resign from second respondent
within 3 days and not to disclose the applicant's confidential
information to any third party, failure to resign would result in
the
applicant approaching the High Court for an interdict on an urgent
basis.
[11]
Having been provided by Engelsman Maga bane Inc with the requested
documents, attorneys for the
respondents LVH Attorneys on 21 June
2021 in a letter marked "KR7", makes it plain that the
clients dispute the assertion
of the existence of a protectable
interest and would therefore not give any undertaking as demanded by
Engelbrecht. It is then
that this triggered the applicant's approach
to this Court on an urgent basis for a rule
nisi.
[12]
By virtue
thereof that the applicant is seeking to enforce a contractual right
in restraint of trade it bears the
onus
to
prove the existence of a contract and the infringement of such a
right for it to succeed in obtaining a final interdict. See
Basson
v Chilwan and Others
[2]
.
The
applicant has provided both the first respondent's employment
contract "KR1" and the restraint of trade agreement
"KR2".
[13]
Mr Van
Niekerk SC, counsel for the applicant, submitted that while the first
respondent is not really disputing that the contract
was entered
into, she has also in effect offered contradictory denials to the
assertions by the applicant. He points out that at
para 25 of the
heads of argument their counsel wrote:
"In
this case there is no dispute that the first respondent concluded a
restraint of trade agreement with the applicant..."
He
invoked the authority of
Graney
Property Limited v Mana/a and Others
[3]
and
borrowed the remarks by Petse JA that the first respondent was
seeking to envelope her case in a fog, which
hides or
distorts
the reality.
[14]
This is what the applicant avers at para 27 of its founding papers
relating to the existence of the agreement:
"In
2019 and as a result of an unfortunate experience with another
employee divulging confidential information of the applicant
to a
competitor, it was decided that all employees of the applicant must
enter into a new confidentiality and restraint of trade
agreement.
This agreement was entered into by the applicant and the first
respondent on 30 July 2019 and a copy of which is attached
as
Annexure "KR2"."
[15]
In the first respondent's answering affidavit, paras 3, 4, and 5 the
following response is gathered:
"3.
The applicant relies on a restraint dated 30 July 2019 (KR2) which
would seek to sterilise me from employment for a period
of six-years
throughout the geographical region of the Northern Cape.
4.
Merely days before I left the applicant's employ I was
presented with a new agreement which contained confidentiality and
other
undertakings which conflict with those on which the applicant
relies. I am therefore advised that the contract on which the
applicant
relies in this application has been novated by a different
agreement.
5.
I signed the superseding agreement but was not provided
with a copy. The terms of the new document were far less onerous than
those
reflected in the document on which the applicant
relies."
[16]
At para 97 of her statement, the first respondent went on to say:
"I
state that to the best of my knowledge, the agreement referred to in
these paragraphs has been novated in the days before
I resigned when
we concluded a different agreement."
At
para 96 of her answering affidavit a catchall denial statement is
recorded that reads:
"Save
as aforesaid, the allegations in these paragraphs are denied."
[17]
The first respondent's explanation gleaned from her answering
affidavit is unconvincing. As correctly argued
by Mr Van Niekerk,
there is no express denial of the existence of a contract concluded
between the parties. It is significant to
note that she maintains
that the subsequent agreement that she was furnished with, which had
less onerous terms, novated the initial
agreement. It is clear to me
that the first respondent is contradicting her own version in as far
as the existence of a contract
is concerned. If an agreement does not
exist as she has contended in her answering affidavit, then on what
basis will a non-existent
agreement be novated? Further, the first
respondent has not furnished any substantiating evidence on which
contract she was referring
to whose terms, according to her, were far
less onerous than those contained in "KR2".
[18]
The clear right that the applicant is relying on stems from the
contract. I am satisfied that the applicant
has made out a case of
the existence of the restraint of trade agreement from which the
clear right flows. I reject the version
of the first respondent in
this regard, which has failed to raise a real, genuine or
bona
fide
dispute of fact regarding the agreement between the
applicant and the first respondent.
[19]
The
principle laid down in
Magna
Alloys and Research (SA) (Pty) Limited v Ellis
[4]
,
and
followed by the Courts in several other matters
[5]
,
is that agreements in restraint of trade are valid and enforceable
unless they are unreasonable and thus contrary to public policy.
In
other words, the restraint of trade must be reasonable for it to be
enforceable.
The
onus
of
proving
that
an
agreement
in
restraint
of trade is
invalid lies with the person
resisting
the
enforcement
of such
a
contract,
in
the
case
before
me,
it
will
be
on
the
first
respondent.
[20]
In
Basson
v Chilwan and Others
[6]
,
Nienaber
JA has identified four questions that should be asked when
considering the reasonableness
of
the
enforcement
of a
restraint:
(a)
Does the one party have an interest that deserves protection
after termination of the agreement?
(b)
If so, is that interest threatened by the other party?
(c)
In that case, does such interest weigh qualitatively and
quantitatively against the interest of the other party not to be
economically
inactive and unproductive?
(d)
Is there an aspect of public policy, having nothing to do with
the relationship between the parties that requires that the restraint
be maintained or rejected?
[21]
The Supreme
Court of Appeal in
Reddy
[7]
held
that in deciding whether to enforce a restraint of trade, the
following must be considered:
"[15]
A court must make a value judgment with two principal policy
considerations in mind in determining the reasonableness
of a
restraint. The first is that the public interest requires that
parties should comply with their contractual obligations, a
notion
expressed by the maxim pacta servanda sunt. The second is that all
persons should in the interests of society be productive
and be
permitted to engage in trade and commerce or the professions. Both
considerations reflect not only common-law but also
constitutional values..."
[22]
Does the
applicant have a protectable interest that is threatened by
the first
respondent? In
Den
Braven SA (Pty) Ltd v Pi/lay and Another
[8]
,
Wallis
AJ, then, made these pronouncements pertaining
to
a
protectable
interest:
"In
considering the facts of a particular case it must always be borne
in mind that a protectable interest in this form of customer
connections does not come into being simply because the former
employee
had contact with the employer's customers in the course of
their work. The connection between the former employee and the
customer must be such that it will probably enable the former
employee to induce the customer to follow him or her to a new
business."
[23]
The applicant employed the first respondent as Sales Manager from
2017 to 2020. The evidence presented to
the applicant's deponent, Mr
Grobler, suggests that the first respondent was very adept at sales
and had almost exclusive contact
with the customers and, due to her
impressive personality, had built a close relationship with them. She
had also acquired full
and confidential knowledge of each customer's
details as well as their needs and requirements. It was further
alleged that the
nature of the relations between her and the
applicant's customers was such that she could easily convince a
customer to follow
her to a competitor like the second respondent.
These averments accord with the enunciation made in the
Den Braven
- case (supra).
[24]
The first respondent's response to these pertinent allegations is to
deny that she had exclusive contact
with the customers, a denial. Mr
Whittington, in oral argument, submitted that the applicant has
overrated his client's importance
and significance. In any event, so
the argument went, customer connections wane over time.
[25]
The other area where the first respondent refers to her contact with
the applicant's customers is at para
47 where she stated:
"In
this new position I was responsible for day-to-day sales in the
office, liaising with clients and providing feedback on
queries,
quotes, and the progress of work done in the workshop. I also
compiled sales reports for management and visited clients
on site to
establish, develop and maintain positive business and customer
relationships."
Mr
Van Niekerk submitted that when the applicant wrote in her whatsapp
message that she can now once again do what she was good
at, she was
referring to her ability to foster and maintain customer relations.
[26]
It is common cause that the first respondent was a Training
Coordinator within the mining industry prior
to being employed by the
applicant. She confirms in her answering affidavit that she
'cultivated a number of relationships' with
businesses in the mining
industry. She also says that during her employment with the applicant
she made use of the contacts she
had developed as a Training
Coordinator. Google explains
"cultivating friendships"
as:
"to develop a friendship or relationship with
someone, usually in order
to get
an
advantage
from it."
[27]
The
pronouncements
by
the
Court
in
Den
Braven
[9]
are
relevant:
"His
employment was a sales representative. Part and parcel of his duties
was to find customers for the applicant's products.
The fact that he
did so and enjoyed some success does not enure to his advantage in
seeking to resist the enforcement of the restraint
undertaking. The
customers that he procured by his efforts were the customers of the
applicant and the trade connection established
in consequence of his
efforts was a trade connection between the applicant and the
customers, not one between himself and the customers.
Indeed, the
fact that he was able of his own volition to identify new customers,
approach them and secure their custom for the
applicant is indicative
of the existence of the type of trade connection that is
protectable."
[28]
The applicant has also averred that the first respondent had access
to confidential information while she
was in its employ. At para 7 of
her answering affidavit, the following is recorded:
"I
left the applicant's employ some ten months ago, at the beginning of
October 2020. I state that none of the information
to which I may
have been privy would still be of value at this time. Nor do I
have any possible residual influence over any of the applicant's
customers at
this time, assuming I
ever
acquired some form of influence."
And
at para 9 she adds:
"I
deny that I have had any access to any of the applicant's proprietary
information or that the second respondent is a direct
competitor of
the applicant."
[29]
At Para 14 of the Replying affidavit the applicant states:
"Even
though the first respondent is indeed not a technician, engineer or
designer and have not been involved in the design,
assembly and
installation of goods supplied by the applicant, she has in-depth
knowledge of what exact component parts were sourced
by her from the
various suppliers of the applicant, in order for the applicant to be
able to assemble a certain installation according
to the requirements
of a certain client of the applicant
-
this is indeed
confidential information which is in possession of the first
respondent and which could certainly be used to the
advantage
of a competitor
like the second
respondent."
[30]
The issue is not the first respondent's qualifications and expertise
but rather, the confidential information
that she has gained while in
the employ of the applicant and the potential risk of availing it to
the competitor. The first respondent
had not filed any affidavit by
any of the applicant's customers who had interacted with her while
she was still with the applicant
that explains that they would not be
influenced by their relationship with her to move their customer base
to the second respondent.
[31]
Mr
Whittington, referring to para 14 of the replying affidavit,
countered the allegation that first respondent possessed the
technical
knowledge and could reproduce confidential information as
well as the technical knowledge regarding the installation and
construction
of a battery room by submitting that she has not
acquired any form of formal training or qualifications. Counsel
contended that
her skills and abilities flow from her personality;
that
sales
are sales which she is good at; that her skills and abilities are
a part of
herself and that she cannot be precluded from making use
of them by
a contract in restraint of trade and invoked
Aranda
Textile Mills.
[10]
[32]
First respondent is deliberately vague by stating that
"none
of the information to which I may have been privy to would still be
of value at this time."
All this is within her personal
knowledge and so is the phrase:
"Nor do I have any possible
residual influence over any of the applicant's customers at this
time, assuming I ever acquired
some form of influence".
It
is the applicant's case that she will use the influence that she had
on its clients to take them to its competitor. She has not
dispelled
the assertion.
[33]
Mr Whittington submitted that the second respondent, BSSC Radiators
(Pty) Ltd, is one of the suppliers supplying
radiators to the
applicant and therefore, the information that is used is also not
confidential as it is already in the public
domain.
[34]
First respondent has not expressly denied that she had contact with
the applicant's clients. Her promotion
merely two years into her
employment with the applicant is demonstrable of her strong sales
attributes coupled with her personality,
which, both parties agree,
served as an added advantage to her job. Clearly, this can only mean
that she had established those
customer connections while still
employed by the applicant. The argument by her counsel that the
relationship with her former clients
had dissipated.
I
find, however, that the first respondent had trade connections
through customer contact that she can still exploit to the benefit
of
the second respondent. I further find that she must have had access
to confidential information which she can use, coupled with
her
influence on the applicant's customers to the benefit of the second
respondent.
IS
THE SECOND RESPONDENT A COMPETITOR?
[35]
The restraint in the agreement is for her not to engage in any
business in competition (direct competition)
with the applicant.
Before the matter was enrolled, there was correspondence between the
parties. The letter by the first respondent's
attorneys dated 21 June
2021 addressed to the applicant's attorneys is a good starting point.
The numbered para 2 of the letter
reads:
"While
we note that BSSC Radiators (Pty) Ltd is a competitor of Kurad
Kuruman Radiators CC ("Kuruman"),
our client
denies
that Kuruman has any legitimate proprietary
interest that could reasonably justify such an all-encompassing,
overbroad, and onerous
restraint of trade provision as is contained
in the annexed employment and confidentiality agreements."
(Own
emphasis added)
In
oral argument, Mr Whittington argued that the letter by the first
respondent's attorney is not an unqualified admission but must
be
assessed with the factual matrix. However, counsel was constrained to
concede, correctly in my view, that there is an overlap
between the
two businesses. This concession therefore confirms that the two
businesses are competitors.
[36]
The applicant has unequivocally asserted that the second respondent
is a competitor. In its founding affidavit,
the following appears at
para 18:
"It
has recently become known that the 2nd respondent is desirous to step
up its business activities in the Northern Cape and
specifically
within the area of Kathu and Kuruman, which means that the 2nd
respondent is indeed, as far as the cooling part of
the applicant's
business is concerned, in direct competition
with the
applicant..."
[37]
In her answering affidavit, specifically at para 85, first respondent
says the following:
"I
deny that it has been admitted that the second respondent is a
competitor to the applicant."
If
her stance is that the second respondent is not the applicant's
competitor, and that she was no longer an employee of the applicant,
since her resignation what had prompted her to send the applicant the
Whatsapp message informing its members that she was employed
by the
second respondent? The submission by Mr Van Niekerk is correct that
if the applicant is not a competitor then logically
there was no
reason for her to have informed the applicant of her acceptance of a
job offer with the second respondent.
[38]
In oral argument, Mr Whittington referred this Court to paras 61 to
65 of the answering affidavit in substantiation
that the nature of
the businesses of the applicant and the second respondent are
different. The second respondent has not even
ventured into battery
rooms, which, as averred by the applicant, is a lucrative developing
business for the applicant. There is
therefore no competition in that
regard as contended by the first respondent.
[39]
I am therefore satisfied that the applicant has discharged the
onus
of showing that it has a commercial interest deserving protection
at the termination of the agreement and further that such interest
will be prejudiced by the first respondent taking up employment with
its competitor, the second respondent.
ONUS
AND ENFORCEMENT
[40]
The
onus
was on
the first respondent to show that enforcement of the agreement would
be unreasonable. Mr Van Niekerk, invoking
Magna
Alloy
[11]
,
Den Braven
[12]
,
and
Halsted
[13]
,
argued
that the first respondent has failed to show unreasonableness.
Counsel asked the court to, in its discretion, enforce the
restraint
covenant in terms different from those initially
agreed to
by the
parties.
[41]
Mr
Whittington, in countering this submission, contended that the
applicant bore the
onus
to
allege and prove the existence of a contract and its breach in the
founding papers but has failed to do so and, instead, tried
to make
its case in reply, which it is precluded to do. In substantiation of
his argument, cited
Natal
Joint Municipal Pension Fund v Endumeni Municipality
[14]
,
where
Wallis JA sounded the
following
caution:
"Judges
must be alert to, and guard against, the temptation to substitute
what they regard as reasonable, sensible or business
like for the
words actually used. To do so in regard to a statute or statutory
instrument is to cross the divide between interpretation
and
legislation. In a contractual context it is to make a contract for
the parties other than the one they in fact made."
[42]
Mr Whittington submitted that the existing restraint agreement does
not contain a severability clause, hence,
Mr Van Niekerk's submission
to this Court to sever the existing terms of the agreement. Counsel
concluded that by doing so, the
Court will be making a contract for
the parties, which it is precluded from doing.
[43]
There are essentially two areas in contention which in Mr
Whittington's submission, result in the applicant
asking the Court to
adjust the restraint, namely, the geographical area which in the
agreement covers the entire Northern Cape
and the duration of the
restraint which is 72 months. According to Mr Whittington, referring
this Court to para 37 of the founding
affidavit, argued that the
applicant was aware that the terms were overbroad and therefore
unreasonable. Since the applicant is
seeking interdictory relief, the
application must be based on the terms of the contract and that there
is therefore no contract
upon which the interdict can be confirmed.
Counsel urged accordingly that the rule
nisi
not to be
confirmed.
[44]
The
contention of Mr Whittington is misplaced. The correct approach is in
Den
Braven
[15]
at
para
54:
"[54]
I confine my remarks to the question whether a restraint of trade
agreement that is too broad in its terms can on those
grounds be held
to be contrary to public policy and unenforceable in circumstances
where, within the four corners of the agreement,
there are restraints
clearly spelt out which are reasonable in nature and which are the
only restraints that the court is asked
to enforce. In my judgment in
that situation the court should in accordance with binding precedent
grant relief to the applicant.
There is no basis in law for refusing
to do so by holding the entire agreement to be unenforceable on the
grounds of public policy.
Such a finding is in my view contrary to
the law as first articulated by Botha J in National Chemsearch (SA)
(Pty) Ltd v Barrowman
and Another
[1979 (3) SA 1092
(T) and endorsed
by the Appellate Division (as it then was) in Magna Alloys and by the
Supreme Court of Appeal in a number of subsequent
cases, of which
Reddy v Siemens Telecommunications is the most recent. It is not
appropriate in those circumstances to seek to
apply the principles of
severability applicable in other contractual situations as laid down
in cases such as Sasfin v Beukes
[1989 (1) SA 1
(A)]."
[45]
There is no
public policy that makes this restraint unenforceable. Taking cue
from
Reddy
[16]
I am
now left with the responsibility of making a value judgment. First, I
have already found that a restraint of trade agreement
exists between
the applicant and the first respondent. They must both comply with
their contractual obligations. This means, the
first respondent
should live up to her contractual obligation of not working for a
competitor within the specified timeframe and
designated area. The
second consideration is that all persons, which includes the first
respondent should, in the
interests
of society, be productive and be permitted to engage in trade and
commerce
or
the
professions.
[46]
Taking into consideration that the employee is employed by the
applicant's competitor in the position of
Sales Manager, a position
she held with the applicant, her knowledge of the applicant's
clients, client requirements and needs
cannot be overlooked. It is
also significant that she had 'cultivated' customer connections and
her influence on those customers
cannot be downplayed. As much as the
respondents' counsel may have repeatedly argued that the
relationships have waned with time,
in sales environments,
relationships can be resuscitated. The second respondent knew when it
employed the first respondent that
her attributes will help grow its
business. The fact that they are competitors is not a neutral or
unknown factor. There is no
gainsaying that the knowledge and
information that the first respondent has gained while employed by
the applicant may probably
be used to the advantage of the second
respondent. With modern technology it is not farfetched that she may
even have copied confidential
information.
[47]
In summary, I conclude that the applicant has succeeded to prove the
existence of an agreement. The first
respondent has breached the
agreement by accepting the employment offer made to her by the second
respondent, whom I find to be
the applicant's competitor. The first
respondent not only had access to the applicant's confidential trade
information but also
had contact with its customers. I have no doubt
that she could easily influence them to follow her to her new
employer. This weighed
heavily against whether she would be rendered
unemployed. It is my view that she holds strong attributes that make
her employable
elsewhere. The fact that after resigning from the
applicant she was able to secure employment with IST Hadco, which is
not a competitor,
is an example. It is for these reasons that I
regard her trade connections and the relationships she built with the
applicant's
customers as deserving of protection. The first
respondent has failed, in my view, to show that the restraint is
unreasonable.
[48]
I do not agree with the submission by Mr Whittington that addressing
the duration of the restraint
and the geographical area amounts to
making a contract for the parties or that the Court stepped into the
arena. I am also of the
view that the two instances do not form a
basis in law to conclude that the entire agreement is unenforceable
on the grounds of
public policy.
[49]
I however regard the period of the restraint as unreasonably
long and will exercise my discretion to determine a period that I
deem
reasonable. A period of 12 months calculated from 01 June 2021
would be reasonable for the restraint. Subject to this qualification,
the rule
nisi
stands to be confirmed.
[50]
On the question of costs: Both counsel correctly confirmed
that the costs of 29 June 2021 stood over for later determination.
Those
costs therefore form part of these proceedings. There is no
reason why costs should not follow the result.
[51]
Resultantly, I make the following order:
1.
The first respondent is interdicted and restrained for
a period of 12 (TWELVE) months from 01 June 2021, and within a radius
of
200km from Kuruman, to accept and hold any employment with any
person, firm, group, partnership or association, including the second
respondent, which competes
with the business of the
applicant.
2.
The first respondent is interdicted and prohibited from
performing any of her duties in terms of her employment with the
second
respondent during the period and within the area as stated in
the preceding paragraph.
3.
The first respondent is interdicted and prohibited from
directly or indirectly disclosing any confidential information with
respect
to the business of the applicant, to any other person or
business, including
the
second
respondent.
4.
The first and second respondents are ordered to pay the
costs of this application,
including the costs of
29
June
2021,
jointly
and severally,
the
one paying the
other
to be absolved
pro tanto.
M.C.MAMOSEBO
JUDGE
OF THE HIGH COURT
NORTHERN
CAPE DIVISION
For
the Applicant:
Adv. JG Van Niekerk SC
Instructed
by:
Engelsman Magabane
For
the Respondent:
Adv. Dean
Whittington
Instructed
by:
LVH Attorneys
c/o
Duncan & Rothman
[1]
Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd
1984 (3) SA
620
(AD) at 634H - 635C
[2]
[1993] ZASCA 61
;
1993 (3) SA 742
(A) at 776H - 777B
[3]
[2013] 3 All SA 111
(SCA) paras 19 and 20
[4]
[1984] ZASCA 116
;
1984 (4) SA 874
(A) at 891 B-C
[5]
Reddy v Siemens Telecommunications (Pty) Ltd
2007 (2) SA 486
(SCA);
Sasson v Chilwan
[1993] ZASCA 61
;
1993 (3) SA 742
(A) at 762B - H; Halsted and Co.
(Pty) Ltd v Viljoen and Another [2016) JOL 36580 (NGK)
[6]
Sasson (supra) footnote 5 at 767G - H
[7]
Reddy (supra) footnote 5 at para 15 and 16
[8]
2008 (6) SA 229
(D) at 236D - E
[9]
Den Braven (supra) footnote 8 at para 237J - 238A
[10]
Aranda Textile Mills (Pty) Ltd v Hurn & Another [2000)
4 All SA
183
(E) at para 33
[11]
(supra) at 896A - E
[12]
(supra) at para 55
[13]
(supra) at para 48
[14]
(920/2010)
[2012] ZASCA 13
;
[2012] 2 All SA 262
(SCA);
2012 (4) SA
593
(SCA) (16 March 2012) para 18
[15]
Den Braven (supra) para 54
[16]
Reddy (supra) para 15