About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Free State High Court, Bloemfontein
SAFLII
>>
Databases
>>
South Africa: Free State High Court, Bloemfontein
>>
2019
>>
[2019] ZAFSHC 205
|
|
Findaload (Pty) Ltd and Others v CMT Transport (Pty) Ltd and Another (584/2019) [2019] ZAFSHC 205 (31 October 2019)
IN THE HIGH COURT OF SOUTH AFRICA,
FREE STATE DIVISION, BLOEMFONTEIN
Case No.: 584/2019
In
the matter between:-
FINDALOAD
(PTY) LTD
First Applicant
LOHAN
LOGISTICS (PTY) LTD
Second Applicant
SCARLICENTO
Third Applicant
And
CMT
TRANSPORT (PTY)
LTD
First Respondent
JOHANNES
PHILIPPUS
KRUGER
Second Respondent
DANIE
BLOEM
Third Respondent
JUDGMENT
BY:
C. J. MUSI, JP
HEARD
ON:
1 AUGUST 2019
DELIVERED
ON:
31 OCTOBER 2019
[1]
This matter concerns a director's fiduciary duty, and the enforcement
of a restraint
of trade agreement against an employee.
[2]
The
applicants sought the following relief:
1.
Interdicting
and restraining the second respondent from appropriating and
diverting business opportunities to the first respondent,
falling
within the scope and line of business of the first applicant;
2.
Interdicting
and restraining the second respondent from continuing to breach his
fiduciary duties towards the first applicant by
managing the first
respondent;
3.
Interdicting
and restraining the second respondent from disclosing the first
applicant's information to the first respondent;
4.
Interdicting
the first, second and third respondents from representing to members
of the public that the first respondent is associated
with,
alternatively related to the first applicant, alternatively that the
first respondent has any interest in the first applicant.
5.
Interdicting
and restraining the first respondent from rendering logistics and
transport services whilst the second respondent is
a director of the
first respondent and of the first applicant;
6.
In
the event of the second respondent resigning his appointment as
director of the first applicant, interdicting and restraining
the
first respondent from delivering logistics and transport services to
any existing clients of the first applicant;
7.
Interdicting
and restraining the first and second respondents from unlawfully
competing with the first applicant by using any information
pertaining to the first applicant's business forthcoming from either
the second or third respondents;
8.
Interdicting
and restraining the first respondent from conducting logistics and
transport business with any clients which it obtained
from the date
that it commenced with business until a period to be determined by
the Court after date of the second respondent's
resignation as
director of the first applicant, in the event that the second
respondent resigns as director of the first applicant;
9.
Ordering
and directing the first respondent to render a full account,
supported by documents and vouchers, of all logistics and
transport
services or services falling within the scope of services recorded in
item 4 of the Memorandum of Understanding appended
to the founding
affidavit as Annexure "H", that it has rendered since the
first day it commenced business until date
of this order;
10.
Ordering
and directing the first respondent to keep a full and proper account
of all the logistics and transport services and any
other services
falling in the scope of services that the first applicant recorded in
Item 4 of the Memorandum of Understanding,
appended to the founding
affidavit as Annexure "H", which account must be furnished
to the applicant within 7 days of
a demand that the account be
rendered to the applicant and which obligation will subsist,
notwithstanding demand that the account
be delivered to the Applicant
for as long as the second respondent remains a director of the first
respondent and, in the event
of the second respondent's resignation
as director, for a period of three years thereafter, alternatively
such period as the Court
deems meet;
11.
That
the third respondent be interdicted and restrained from being
employed by or be in the employ or hold any direct or indirect
interest in the first respondent in any capacity for a period of one
(1) year calculated from
23 January
2019;
12.
That
the third respondent be interdicted and restrained for a period of
one year calculated from
22 January
2019
from being employed or becoming
directly or indirectly associated or directly or indirectly carrying
on or to be interested or engaged
in any capacity whatsoever in any
business or enterprise or association of persons, both corporate and
incorporated, including
the Second Respondent's business, which
carries on a competing business with that of the Applicant conducting
or carrying on business
in South Africa;
13.
Restraining
and interdicting the first respondent from employing or continuing to
employ the third respondent in any capacity or
from utilizing the
third respondent directly or indirectly or to be engaged with the
third respondent in any capacity whatsoever,
including to be directly
or indirectly associated or directly or indirectly carrying on or to
be interested or engaged in any capacity
whatsoever, either as
principal, agent, partner, representative, shareholder, director,
employee, consultant, advisor, financier,
or in any other like or
similar capacity in the first respondent any time
23
January 2020;
14.
Interdicting
and restraining the third respondent from providing any service to or
lend any aid or advice to any of the customers
or client of the first
applicant for a period of one year, calculated from
23
January 2019;
15.
Interdicting
and restraining the third respondent from soliciting or encouraging
any person, firm, corporation or any other business
entity, or
persona or any like thereof, who are customers, clients, suppliers,
business associates or referral sources of the first
applicant to
cease doing business with the first applicant or any of its
associated companies or to do business with the first
respondent or
to do business with any competing business of the first applicant,
including the first respondent;
16.
That
the respondents pay the costs of the application on the scale as
between attorney and client, alternatively party and party
scale,
jointly and severally, the one paying the others to be absolved.
17.
Such
further and alternative relief as the Court may deem meet."
[3]
Lohan
Holdings (Pty) Ltd, a duly registered and incorporated company, holds
100% of the ordinary issued shares in eight companies.
The
shareholders of Lohan Holdings are Evergreen Trust 40%, the EP
Ceronio Trust 40% and the JP Kruger Trust 20%.
[4]
Mr
Johannes Philippus Kruger (Kruger), the second respondent, and Mr L
Laubscher are the trustees of the JP Kruger Trust.
[5]
Lohan
Logistics (Pty} Ltd, the second applicant, a duly registered and
incorporated company, is one of the subsidiaries of Lohan
Holdings.
The directors of Lohan Logistics are Kruger, Mr Evert Ceronio and Mr
Johan Ceronio.
[6]
Lohan
Logistics, Ruvan Besigheidstrust (Pty) Ltd, Find A Load CC,
Scarlicento (Pty) Ltd, the third applicant, a duly registered
and
incorporated company, joined forces and formed Findaload (Pty) Ltd,
the first applicant, a duly registered and incorporated
company.
Findaload was registered on 31 July 2017. These four entities entered
into a Memorandum of Understanding that governed
their relationship.
[7]
Lohan
Logistics holds 50% of the ordinary issued shares in Findaload and
the other 50% is held by Scarlicento. The directors of
Findaload are
Kruger, Johan Ceronio, Evert Ceronio and five other persons. Mr
Daniel Johannes (Danie) Bloem, the third respondent,
was an employee
of Findaload.
[8]
The
first respondent is CMT Transport (Pty) Ltd, a duly registered and
incorporated company. Kruger is the sole director of the
first
respondent.
[9]
Kruger,
Johan Ceronio and Evert Ceronio conducted business together. Johan
and Evert are brothers. Kruger initially worked for the
Ceronio
brothers. He turned out to be an astute, loyal and resourceful
employee who worked himself up to become a shareholder in
Lohan
Holdings and some of its subsidiaries. Lohan Logistics was formed as
a result of Kruger's suggestion. The Ceronio brothers
had no
experience in logistics.
[10]
The
three got along like a house on fire. The logistics business was
doing well. Negotiations started with the entities mentioned
in
paragraph [6] above which resulted in the registration of the
conglomerate called Findaload, on 31 July 2017.
[11]
Lohan
Logistics provided 8 trucks to Findaload. The latter provided the
former's trucks with transport work and saw to the general
management
scheduling and day-to-day running of the trucks. All the paperwork
related to scheduling, freight notes, delivery notes
and invoicing
was also done by Findaload. It deducted an 8% handling fee and all
expenses from the invoice amount and paid the
rest over to Lohan
Logistics. The arrangement was the same with regard to the third
applicant.
[12]
Findaload
experienced management or administrative problems as a result of
which Kruger was appointed its CEO with effect from September
2018.
He simultaneously held the position of project manager at Lohan
Civils which is an affiliate of Lohan Holdings.
[13]
Kruger
and the Ceronio brothers could not sustain their good relationship.
The cracks widened. Their wives initially received a
salary from
Lohan Civils. This was stopped during October/November 2017, much to
Kruger's dissatisfaction.
[14]
During
January 2018, Johan Ceronio accused Kruger of stealing money from
Lohan Civils as a result of which Kruger's laptop was confiscated
by
Johan. He was exonerated and his laptop was returned.
[15]
The
first respondent was registered on 24 July 2018 and Kruger became a
director thereof on 19 October 2018. Kruger did not disclose
this
fact to the Ceronio brothers or the other directors of Findaload.
[16] On 14
November 2018, Kruger was suspended as an employee of Lohan Civils.
According to him, he
was thus also suspended as the CEO of Findaload.
A charge sheet was given to him and he was informed that a
disciplinary inquiry,
with regard to misconduct committed as an
employee of Lohan Civils, would be held on 5 December 2018. He was
removed as a director
of Lohan Holdings on 30 November 2018. He
resigned as an employee of Lohan Civils on 5 December 2018 and
instituted constructive
dismissal proceedings against Lohan Civils.
[17]
The first respondent hauled its first
freight on 29 November 2018. This application was launched on 7
February 2019. According to
Kruger he resigned as a director of Lohan
Logistics "shortly after this application was served upon me".
He also stated
that he is no longer a director of Findaload.
[18]
The third respondent entered into an
employment contract with Findaload on 11 September 2018. It is not in
dispute that his employment
contract contains a restraint clause
embodied in clause 22 thereof.
[1]
The restriction was to be applicable for one year after termination
of the employment contract and would be enforceable in the
entire
Republic of South Africa.
[19]
When his employer suspected that he is
working against its interest by channeling work to the first
respondent, it decided to institute
disciplinary proceedings against
him. He resigned on 22 January 2019.
[20]
The third respondent denied that he
assisted the first respondent. He stated that he was head hunted by
the first applicant due
to his expertise and experience in the
freight industry. He joined the first applicant on 28 June 2018. He
assisted the first applicant
by introducing clients to it which he
had from his previous employment and business.
[21]
He further denied that he was privy to
any confidential information and did not have access to any programs
and or records of a
confidential nature relating to client lists and
or any confidential documents of the first applicant. He admitted
that he had
access to excel programs and mixtelematics tracking
systems which are standard systems used in the transport industry by
various
transport companies. He started in the transport industry
during 2012 and has been using these systems since then.
[22]
The issues that have to be decided are:
1.
Did
Kruger owe a fiduciary duty to any of the applicants?
2.
If
so, does a director's fiduciary duty live on even after the
termination of the relationship?
3.
If it does, did Kruger breach his
fiduciary duty?
4.
Should the restraint clause be enforced
against the third respondent?
[23]
These
are motion proceedings for final relief. The Plascon-Evans
rule applies.
[2]
The
factual disputes must be decided based on the respondents' version
together with the undisputed and common cause facts. Untenable
denials by a respondent should not be countenanced.
[24]
When adjudicating the reasonableness of
a restraint, I must have due regard to all the facts disclosed in the
affidavits. If the
facts disclose that the restraint is unreasonable
then the respondent must succeed. The converse is also true. If the
facts disclose
that the restraint is reasonable then the applicants
must succeed. I am called upon to make a value judgment.
[3]
The value judgment must be made after considering two important
policy considerations. First, public interest requires that parties
should comply with their contractual obligations. Second, that all
persons should in the interests of society be productive and
be
permitted to engage in trade and commerce or in their professions.
[4]
[25]
In
Basson
v Chilwan
[5]
four questions that should be asked
in determining whether a restraint clause is reasonable were
identified. These are:
"(a)
Is
daar 'n belang van die een party wat na afloop van die ooreenkoms
beskerming verdien?
(b)
Word so 'n belang deur die ander
party in gedrang gebring?
(c)
lndien wel, weeg sodanige belang
kwalitatief en kwantitatief op teen die belang van die ander party
dat hy ekonomies nie onaktief
en onproduktief moet wees nie?
(d)
Is daar 'n ander faset van openbare
belang wat met die verhouding tussen die partye niks te make het nie
maar wat verg dat die beperking
gehandhaaf moet word, al dan nie?
(Laasgenoemde vraag kom nie hier ter sprake nie.)
Vir saver die belang in
(c)
die belang in
(a)
oortref, is die beperking in die rel
onredelik en gevolglik onafdwingbaar. Dit is 'n kwessie van
beoordeling wat van geval tot geval
kan wissel..."
[6]
[26]
Section 76 (2) and (3) of the Companies
Act
[7]
(the Act) reads as follows:
"(2) A director of a company must-
(a)
not use the position of director, or
any information obtained while acting in the capacity of a director-
(i)
to gain an advantage for the director,
or for another person other than the company or a wholly-owned
subsidiary of the company;
or
(ii)
to knowingly cause harm to the company
or a subsidiary of the company; and
(b)
communicate to the board at the
earliest practicable opportunity any information that comes to the
director's attention, unless
the director-
(i)
reasonably believes that the information
is-
(aa)
immaterial
to the company; or
(bb)
generally
available to the public, or known to the other directors; or
(ii)
is bound not to disclose that
information by a legal or ethical obligation of confidentiality.
(3) Subject to subsections (4) and (5), a
director of a company, when acting in that capacity, must exercise
the powers and perform
the functions of director-
(a)
in
good faith and for a proper purpose;
(b)
in the best interests of the
company; and
(c)
with the degree of care, skill and
diligence that may reasonably be expected of a person-
(i)
carrying out the same functions in
relation to the company as those carried out by that director; and
(ii)
having the general knowledge, skill and
experience of that director."
[27]
A director's fiduciary duty and the
remedy for the breach thereof have been succinctly set out in
Cyberscene Ltd v I-Kiosk Internet and
Information (Pty) Ltd
[8]
.
It was summarised as follows:
"
A
director stands in the fiduciary relationship to the company even if
he is a non executive director... It is a long-established
principle of South African law that such a fiduciary duty exists and
that the breach thereof is remediable by means of an interdict...
Jt
has also been held that the duty of directors and senior employees is
far more extensive than that owed by more junior employees.
Thus the
duty owed by senior management; into which category the second to
sixth respondents fell, is far above that of ordinary
employees,
whose duty extends only to respect for trade secrets and confidential
information...Furthermore, the common-law fiduciary
duty of directors
owed to the company subsists even after the appointment has ceased...
The liability for breach of such a fiduciary
duty is not delictual,
but sui generis... Clearly a director acts in breach of his fiduciary
duty to the company where he sabotages
the company's contractual
opportunities for his own advantage, or where he uses confidential
information to advance the interests
of a rival concern or his own
business to the prejudice of those of his company... It has also been
held that a director has a
duty not to misappropriate corporate
opportunities...A director has a duty not to compete improperly with
the company in the sense
of becoming a director of or holding another
office in a rival concern, thereby placing himself in a position in
which his duties
or interests conflict..."
[9]
[28]
I agree that a
director's fiduciary duty continues regardless of the determination
of the company-director relationship. Is this
duty limitless? I think
not. I say this because, first, the duty is created, by the
particular relationship, to exact loyalty and
it logically follows
that the appurtenant obligation should end when the relationship
ends.
[10]
Second, an ex-director has a right to be economically active and to
be permitted to engage in trade and commerce.
[11]
The public policy against restraint applies with equal force to
directors.
[12]
[29] Directors should,
however, not be allowed to escape their fiduciary duties by breaching
them and subsequently
resigning without consequence. If a link is
established between exploitation of information, benefitting by
putting self interest
before fiduciary duty or exploiting
business opportunities in conflict with the fiduciary duty, by an
ex-director prior to resignation
then the duty will live after
resignation. Regard must be had to the totality of the ex-director's
acts prior to resignation in
order to establish the link. Resignation
should not be used as a means to evade the strict fiduciary duties
imposed on a director.
It is therefore in the interest of justice
that the strict fiduciary duties 'survive' the termination of the
company-director relationship.
[30]
As stated in
Cyberscene,
the liability for breach of a
fiduciary duty is sui generis. When it is established that an
ex-director has benefitted by exploiting
his position as director, he
or she may be held liable. Koh puts it thus:
“
The no-profit rule, on the other
hand, renders a fiduciary liable to account for any gain which he
obtained as a result of taking
advantage of his fiduciary position,
whether there was present a conflict of interest or not. The
fiduciary position could have
given the director access to valuable
information or able to cognizance of some business opportunity.
Liability therefore depends
on there being a connection or link
between gain and office."
[13]
[31]
This view is consonant with section
218(2) of the Act which provides that:
"Any person who contravenes any
provision of this Act is liable to any other person for any loss or
damage suffered by that
person as a result of that contravention.”
[32]
The third respondent has been in the
logistics business for the past 7 years. He was headhunted to work
with the first applicant
because of his experience and expertise in
logistics. He was employed as a freight scheduler. His
responsibilities were to schedule
freight for and on behalf of his
employer. He used to standard operating systems in the execution of
his duties.
[33]
The applicants do not specify what
protectable confidential information the third respondent was privy
to because of his employment
by the Findaload. The applicants made
out a clear case against the third respondent with regard to his
collusion with the first
and second respondents. It is clear that the
third respondent was not a loyal employee. Despite his denials, it is
clear from the
conversations with some of the first applicant's
clients that he knew about the existence of the first respondent and
the link
between it and Kruger. I am convinced that he was less than
candid about his knowledge of and interaction with the first
respondent.
[34]
The totality of the evidence against the
third respondent indicates that he was disloyal to his employer and
that he probably committed
misconduct. That, however, is not enough
to restrain him from having future employment in companies that
compete with or conduct
the same or similar business as the first
applicant.
[35]
The third respondent was employed on 28
June 2018. The employment contract containing the restraint clause
was signed on 11 September
2018. He resigned on 22 January 2019. He
therefore resigned four months after signing the employment contract.
When he was employed
he already had vast experience in logistics. He
also had numerous clients which he introduced to Findaload. There is
no proof of
specific trade secrets, client lists or confidential
information deserving of protection that the third respondent might
use post
his resignation. I'm not convinced that a case has been made
out for the relief sought against the third respondent.
[36] It is common
cause that the second respondent became the sole director of first
respondent while
he was the CEO of the first applicant and a director
of the first and second applicants. He states that when he was
suspended as
the project manager of Lohan Civils he was "thus
also suspended as the CEO of the first applicant". There is no
indication
whatsoever that he was suspended as the CEO of the first
applicant. He clearly abandoned his position as the CEO of the first
applicant.
[37]
He is currently embroiled in legal
proceedings with Lohan Civils claiming that he was constructively
dismissed. When it comes to
the first applicant the second respondent
gives no explanation whatsoever about how he left its employ as the
CEO. He did not resign
as the CEO. He was not dismissed as the CEO of
the first applicant. He absconded. It is clear that the second
respondent allowed
the toxic relationship between him and the Ceronio
brothers to contaminate the relationship between him and the first
applicant.
[38]
The second respondent contended that he
did not have any access to confidential information of the first
applicant. It would be
stretching credulity a bit too far to accept
that a CEO of a company would be restricted or limited when it comes
to information
of the company. The second respondent had access to
the information of the first applicant when he became a director of
the first
respondent. The information need not be confidential
information. Section 76(2) does not limit the prohibition against a
director
using information to the use of confidential information.
[39]
He had access to first applicant's
information when he became the sole director of the first respondent
who was in direct competition
with the first applicant. He did not
disclose the fact that he was a director of the first respondent to
any of his co-directors
or the shareholders of the first applicant.
[40]
The second respondent, as director and
CEO of the first applicant had a duty to secure business
opportunities for the first applicant.
He, however, had an interest
in a business that was in direct competition with the first
applicant. He put himself in a position
where his interest in the
first respondent conflicted with his duty towards the first
applicant.
[41]
The second respondent argued that he had
no dealings with the first and second applicants after he resigned
from Lohan Civils. It
is, however, clear that he embarked on this
deceptive route when he became the sole director of the first
respondent. He has not
yet resigned from Findaload. There is no proof
that he resigned from Lohan Logistics. Even if I accept that he
resigned from both
entities after this application was launched, it
is of no moment. The resignation was calculated to avoid being held
to his fiduciary
duty.
[42]
I agree with Mr. Snellenberg that second
respondent also owes a fiduciary duty to the shareholders of the
first applicant. The second
respondent has, at least, contravened the
provisions of section 76 of the Act. The first respondent benefits
from the second respondent's
unlawful conduct.
[43]
The first and second respondents have
already breached the first applicant's clear right and they intend to
persist with their conduct.
The applicants have no suitable ordinary
remedy at their disposal and they are entitled to prevent any further
breaches by means
of interdictory relief.
[44]
Paragraph 8 of the notice of motion is
too wide. I can understand why it is couched in such wide terms.
There is no evidence as
to who the first respondent's clients are and
when it commenced doing business with those clients. It is also
difficult to establish
whether the first respondent commenced doing
business with those clients as a direct result of the information
given to it by the
second respondent. In order couched in the terms
suggested in paragraph 8 is too wide, unfair and would unduly limit
the first
respondent's right to conduct business.
[45]
In my judgment the orders sought in
paragraphs 9 and 10 of the notice of motion are indeed reasonable and
necessary for the applicants
quantify their damages, if any.
[46]
This is a proper case in which no order
as to costs should be made in favour of the third respondent,
regardless of the fact that
he has been successful. There is
overwhelming evidence into his collusion with the first and second
respondents against the interests
of the first applicant. He worked
against the interest of the first applicant while he was in its
employ. He was not open, frank
and candid with this court pertaining
to his nefarious activities.
[47]
I am not convinced that this is a matter
in which I must make a court order on the higher scale.
[48]
I therefore issue an order:
1.
Interdicting and restraining the second
respondent from disclosing the first applicant's information to the
first respondent.
2.
Interdicting the first and second
respondents from representing to members of the public that the first
respondent is associated
with, alternatively related to the first
applicant.
3.
In the event of the second respondent
resigning his appointment as director of the first applicant,
interdicting and restraining
the first respondent from delivering
logistics and transport services to any existing clients of the first
applicant.
4.
Interdicting and restraining the first
and second respondents from unlawfully competing with the first
applicant by using any information
pertaining to the first
applicant's business forthcoming from either the second or third
respondents.
5.
Ordering and directing the first
respondent to render a full account, supported by documents and
vouchers, of all logistics and
transport services or services falling
within the scope of services recorded in item 4 of the Memorandum of
Understanding appended
to the founding affidavit as Annexure "H",
that it has rendered since the first day it commenced business until
the date
of this order.
6.
Ordering and directing the first
respondent to keep a full and proper account of all the logistics and
transport services and any
other services falling in the scope of
services that the first applicant recorded in Item 4 of the
Memorandum of Understanding,
appended to the founding affidavit as
Annexure "H", which account must be furnished to the
applicant within 7 days of
a demand that the account be rendered to
the applicant and which obligation will subsist, notwithstanding
demand that the account
be delivered to the Applicant for as long as
the second respondent remains a director of the first respondent and,
in the event
of the second respondent's resignation as director, for
a period of one year thereafter.
7.
That first and second respondents pay
the costs of this application, jointly and severally, the one paying
the other to be absolved.
C.J. MUSI, JP
Appearances:
For
the Applicant:
Adv N Snellenburg SC
Instructed by Honey Attorneys
Bloemfontein
For
the 1
st
& 2
nd
Respondent:
Adv S Grabler
Instructed by Rossouws Attorneys
Bloemfontein
For
the 3
rd
Respondent:
Adv AP Berry
Instructed by Taylor Attorneys
Bloemfontein
[1]
NON-DISCLOSUREUNDERTAKING/RESTRICTION OF TRADE
By virtue
of you association with the company, you will become possessed and
will have access to the company's trade secrets and
confidential
information including inter alia, but without limiting the generally
of the foregoing, the following matters, all
of which are
hereinafter referred to as the Company 's Trade Secrets:
22.1
Knowledge and influence
over the company's costumers and business associates.
22.2
Contractual arrangements
between the company and its business associates.
22.3
The names of prospective
customers and their requirements.
22.4
Details
of the company's financial structure and operating results
22.5
Other
matters which relate to the business of the company and in respect
of which information is not readily available in the
course of
business to a competitor of the company.
If,
on termination of your employment for any reason whatsoever, you
take up employment or otherwise become associated with or
interested
in a competitor of the company, the company's propriety interest in
its trade secrets will be prejudiced.
Having
regard to the facts in the paragraphs above you undertake and agree
that
in
order to protect the propriety interests of the company, you will
not, during your employment, or at any time thereafter, either
use
or directly or indirectly divulge or disclose to other (except as
required by the terms of your employment hereunder) any
of the
company's trade secrets, any written instruction, drawing notes,
memorandums or records relating to the company's trade
secrets which
are made by yourself or which come into your possession during the
period of your employment with the company.
Any
of the above-mentioned will be deemed to be the property of the
company and will be surrendered to the company on demand in
any
event upon the immediate termination of your employment and you will
not retain any copies thereof or extract there from.
You
will not, either for yourself, or as the agent of anyone else
persuade, induce, solicit, encourage or procure any employee
of the
company to became employed by or interested in any manner whatever
in any business, firm, undertaking or company (all
of which are
hereinafter referred to as any concern) directly or indirectly in
competition with the business carried on by the
company. You will
not furnish any information or advice acquired by yourself as a
result of your employment with the company
to anyone else which
results in any employee of the company becoming employed
by or directly or indirectly interested
in any manner, in any
concern.
You
will (not) solicit , interfere with or entice or endeavour to entice
away from the company any person, firm or company who
or which
during this period of this agreement or at the date of termination
was accustomed of or was accustomed to dealing with
the company.
In
the event of breaching the above, the company reserves the right to
seek relief from the Industrial, Criminal or Civil Courts
and costs
pertaining to the undertaking and this restriction of trade will be
effective from are of termination for a period
of 1 year and will be
enforceable in the following areas and kilometre radiuses: SA.
Written
permission to relieve you from the non-disclosure
undertaking/restriction of trade must be obtained from the company."
[2]
Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984 (3) SA
623
(A) at 634E to 635C.
[3]
Reddy v Siemens Telecommunications (PTY) LTD
2007 (2) SA 486
(SCA)
at para 14.
[4]
Ibid para 15.
[5]
[6]
Basson v Chilwan
[1993] ZASCA 61
;
1993 (3) SA 742
(A).
(a)
Does the one party have an interested that deserves
protection after termination of the agreement?
(b)
If so, is that interest threatened by the other party?
(c)
In that case, does the interest weigh qualitatively
and quantitatively against the interest of the other party not to be
economically
inactive or 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?
If the
interest in (c) outweighs the interest in (a) then the restraint is
as a rule unreasonable and unenforceable. It is a matter
of
adjudicating each case on its own merits.
6
(My
translation.)
[7]
Companies Act 71 of 2008
.
[8]
Cyberscene Ltd v I-Kiosk Internet and Information (Pty) Ltd 2000 (3)
SA 806 (CPD).
[9]
Ibid para 31.
[10]
Koh, Once a director, always a fiduciary: Cambridge Law Journal
62(2) July 2003 pp 403· 443 at 404.
[11]
Reddy
supra
para 15.
[12]
Koh
supra
404.
[13]
Ibid 406