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[2018] ZANCHC 61
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K2015300118 (South Africa) (PTY) LTD T/A Paw International Security Services and Solutions v Koen and Another (1620/2017) [2018] ZANCHC 61 (18 May 2018)
IN
THE HIGH COURT OF SOUTH AFRICA
(NORTHERN
CAPE DIVISION, KIMBERLEY)
Case
No: 1620/2017
NOT
REPORATBLE
Heard
on 01/12/2017
Delivered
on: 18/05/2018
In
the matter between
K2015300118
(SOUTH AFRICA) (PTY) LTD T/A
Applicant
PAW
INTERNATIONAL SECURITY SERVICES
AND
SOLUTIONS
And
MYNHARDT
KOEN
First Respondent
THE
PRIVATE SECURITY INDUSTRY
REGULATORY
AUTHORITY
Second Respondent
JUDGMENT
PAKATI
J
[1]
The applicant, K2015300118 (South Africa) (Pty) Ltd t/a PAW
International Security
Services and Solutions ("PAW ISS"t a
private company with limited liability, with its registered
address and principal
place of business at No. 4 Kariba Street,
Rhodesdene, Kimberley, approached this Court initially on urgent
basis seeking an interim
order returnable on 25 July 2017 based on an
oral restraint of trade agreement allegedly concluded between PAW ISS
and the first
respondent, Mr Mynhardt Koen, to be enforced against
him.
[2]
The second respondent is a Private Security Industry Regulatory
Authority
(PSIRA"),
the regulating authority for the
private security industry, established in terms of s 2 of the Private
Security Regulations Act,
56 of 2001 ("the Act"). No relief
is sought against it and is only cited for any interest it may have
in the outcome
of this application.
[3]
On 11 August 2017 the applicant filed an application to amend the
notice of motion
in terms of Rule 28 (4) seeking a final order to be
heard on 08 September 2017. Koen filed a notice to object on 24
August 2017.
On 07 September 2017 PAW ISS filed another application
thereby seeking firstly, a final order prohibiting the respondent
from establishing
a business directly or indirectly in competition
with the applicant, as a shareholder, partner, member of a close
corporation,
director of a company or in any other capacity and
secondly, prohibiting the respondent from disclosing to a third party
any of
its information regarding strategic, sensitive and
confidential information. This main application was scheduled
to be heard
on 01 December 2017. Urgency was therefore abandoned.
[4]
Ms Stanton, on behalf of the applicant, urges the Court to grant the
amendment considering
the fact that all the papers had been exchanged
and the hearing of the main application was scheduled for 01 December
2017.
[5]
Koen on the other hand argues that the application to amend is
mala
fide
and causes injustice that cannot even be compensated by an
appropriate costs order. He again filed and served an objection on 12
September 2017 on the basis of non-compliance with Rule 6 (5) (a) and
(b) of the Uniform Rules of Court.
[6]
Rule
28 (4) of the Uniform Rules of Court provides that if an objection
which complies with subrule (3) is delivered within the
period
referred to in subrule (2) (ten days), the party wishing to amend
may, within 10 days, lodge an application for leave to
amend. The
primary object of allowing an amendment is 'to obtain a proper
ventilation of the dispute between the parties, to determine
the real
issues between them, so that justice may be done'.
[1]
The application to amend seeks a final interdict. Koen's objection
complies with subrule (2) and (3) but the applicant failed to
apply
for leave to amend in compliance with Rule 28 (4). The applicant
cannot be allowed to approach court on urgent basis and
later proceed
in the ordinary course as it pleases. In my view the application is
an abuse of process.
[7]
Koen opposes the main application and raises the following points
in
limine;
7.1
That the application lacks urgency and constitutes abuse of process;
7.2
That no application is filed for condonation of the late filing of
the replying
affidavit; and
7.3
That
the founding and confirmatory affidavits filed by PAW ISS in support
of its case are defective for want of compliance with
the Regulations
Governing the Administration of Oaths
[2]
[8]
Koen denies that he was a party to an oral restraint of trade
agreement as alleged by PAW ISS.
However, if the court finds that
there is a restraint of trade agreement concluded by the parties,
such agreement is unreasonable
and unenforceable, so he argues. He
states that the applicant has failed to show that it has any
interests that require protection.
He alleges further that the
application has become moot as only a few months are left for the
restraint period.
LACK
OF URGENCY
[9]
Koen argues that PAW ISS failed to show reasons why it could not be
afforded substantial relief
at a hearing in due course. According to
him the applicant proffers no explanation for the delay from 23 May
2017 to 18 July 2017
when the application was issued and served upon
him. Koen states that PAW ISS's clients deposed to confirmatory
affidavits during
the week of 19 to 23 June 2017, 25 days later and
20 days after the founding affidavit was signed.
[10]
PAW ISS confirms that it knew about Koen's business as a security
company from on
18 May 2017. Annexure "PAW7", a letter
dated 22 May 2017 forwarded to Koen concerning PAW ISS' lends
credence to this.
The applicant gives two reasons why it brought the
application on semi-urgent basis. Firstly, that the restraint of
trade applications
are in their nature urgent and secondly, that in
this Division if a matter is opposed and not brought on urgent basis
it gets postponed
to the opposed roll and probably be heard in
six months' time (November 2017). This, according to the application,
render ineffective
the relief it seeks.
[11]
The applicant argues further that on 19 July 2017 Koen requested for
security for costs
which prompted it to unilaterally remove the
application from the roll of 28 July 2017 thereby abandoning the
prayer relating to
urgency. Koen submits that he had oppose the
application as the urgency alleged by PAW ISS is self-created.
[12]
Although the applicant abandons urgency it is worth dealing with
Rule
6 (12) (a) &
(b)
of the Uniform Rules of Court taking into account the Rule 28 (4)
application to amend the notice of motion. Rule (12) (6) (a)
&
(b) provides:
"(12)
(a) In urgent applications the court or a judge may dispense with the
forms and service provided for in these rules and
may dispose of such
matter at such time and place and in such manner and in
accordance with such procedure (which shall
as far as
practicable be in terms of these rules) as to it seems meet.
(b)
In every affidavit or petition filed in support of any application
under paragraph
(a)
of this subrule,
the applic ant shall set forth
explicit [) the circumstances which he avers render the matter urgent
and the reasons why he claims
that he could not be a fforded
substantial redress at a hearing in due course.
" (My
underlining)
(b)
[13]
In
LUNA
MEUBEL VERVAARDIGERS (EDMS) BPK v MAKIN
&
ANOTHER
t/a MAKIN FURNITURE
[3]
Coetzee
J held:
"Practitioners
should carefully analyse the facts of each case to determine, for the
purposes of setting the case down for
hearing, whether a greater or
lesser degree of relaxation of the Rules and of the ordinary practice
of the Court is required The
degree of relaxation should not be
greater than the exigency of the case demands. It must be
commensurate therewith. Mere lip service
to the requirements of Rule
6 (12)
(c)
will not do and an applicant must make out a case in the
founding affidavit to justify the particular extent of
the departure from the norm, which is involved in the
time and day for which the matter be set down.
"
[14]
In
CALEDON
STREET RESTAURANTS CC v MONICA DE' AVIERA
[4]
Kroon J stated:
"The
intent of the rules is that a modification thereof by the applicant
is permissible only in the respects and to the extent
that is
necessary in the circumstances. The applicant will have to
demonstrate sufficient real loss or damage were
he to be
compelled to rely solely or substantially on the normal procedure.
The court is enjoined by rule 6 (12) to dispose of
an urgent matter
by procedures "which shall as far as practicable be in terms of
these rules".
...
The mere existence of some urgency
cannot therefore necessarily justify an applicant not using Form 2
(a) of the first schedule
to the rules.
"
[15]
It is apposite to note that the original notice of motion that sought
an interim
relief was returnable on 25 August 2017. The first
respondent had to file his notice of intention to oppose and his
answering affidavit
on or before 16h00 on 25 July 2017. On 19 July
2017 he requested the applicant to file security for costs to the
amount of R80
000-00 to be provided on or before 24 July 2017. The
applicant unilaterally filed a notice withdrawing the matter from the
roll
of 28 July 2017 on 26 July 2017. Duncan & Rothman, the
attorneys of record of the first respondent, sent a letter dated 03
August 2017 to Engelsman Magabane, the attorneys of record of the
applicant. Paras 6 to 13 of same record that:
"6.
On Tuesday, 25 July 2017, writer hereof was iriformed by the
Registrar that the Honourable Acting Judge Erasmus is available
to
hear the matter;
7.
[The] writer was then notified that the Honourable Acting
Judge Erasmus might be related to one of the deponents of a
confirmatory
affidavit to the founding affidavit and might not be
able to hear the matter
8.
[The] writer conveyed this to the client who instructed the
writer that should the Honourable Judge confirm the above he will not
object to her hearing the matter;
9.
On Wednesday, 26 July 2017 [the] writer was informed that the
above mentioned Judge will not hear the matter for reasons so stated;
10.
Without
so much as a telephone call to [the] writer hereof the matter
was unilaterally removed from the roll, costs to be
reserved No
option and/or discussion of a possible postponement to a date in the
following week were afforded to our client. This,
after our client
was dragged to Court on an extremely urgent basis and only afforded
four days to file an answer.
11.
On the morning of 27 July 2017, [the] writer received an email
from your Ms Henn's secretary with an attached and unsigned replying
affidavit, accompanied by an undertaking that a signed copy will be
served on our offices on or before OJ August 2017. Till date
no such
signed affidavit was received
12.
What is more, the "unsigned" affidavit contained a
notice of intention to amend, which also has not been formally served
on our offices;
13.
We do not accept the unsigned replying affidavit. As your
email does not contain an undertaking that the signed affidavit will
not
differ.from the one which was sent to [the] writer, we were
deprived of the opportunity to properly advise our client and is the
prejudice suffered by our client in this regard not clear .(sic).
Since
the application was served on our client he was afforded 4 days to
consult, draft an answering affidavit and obtain the necessary
confirmatory affidavits, which, as you will surely agree severely
prejudiced our client.
Your
client after reprimanding our client to file his answering affidavit
within 4 days, now, and after a unilateral notice to remove
was
filed, gives a written undertaking that a formal reply will be filed
on or before the Ft of August 2017, allowing himself a
convenient
extra 5 days to prepare a formal reply. Which is more, he then fails
to perform in terms of the undertaking.
"
[16]
In my view PAW ISS failed to comply with the provisions of Rule 6
(12)
(b) thereby setting forth explicitly the circumstances which it
says renders the matter urgent or semi-urgent for that matter.
[17]
Notably, the signed replying affidavit was filed on 10 August 2017
outside
the time period provided for by the Rules of Court. The first
respondent complied with the timeframes set by the applicant. It is
unacceptable for the first respondent for initially bringing the
matter on urgent or semi-urgent basis but continue with the matter
in
the normal course. No explanation was proffered as to why the
applicant delayed in bringing the matter to court from 28 June
2017
when the founding affidavit was signed to 18 July 2017 when it was
served upon the first respondent. It is absurd and constitutes
an
abuse of process. In my view, the urgency alleged by the applicant is
self-created and cannot be sustained.
CONDONATION
[18]
It is undisputed that the applicant filed its replying affidavit out
of time. However, it explains that the signed version was served on
10 August 2017 due to the fact that the confirmatory affidavits
had
to be signed by various deponents. It states further that the delay
of two days is not inordinate and requests the Court to
condone its
late filing. Koen did not oppose the said application.
[19]
In my view, no prejudice would be suffered by Koen if condonation of
the late filing of the replying affidavit is granted. I therefore
grant condonation
DEFECTIVE
AFFIDAVITS
[20]
It is undisputed that there were some problems with the founding
and
some of the confirmatory affidavits. This is confirmed by the
applicant in paras 3.1 to 3.7 of its replying affidavit thus:
"3.1
I misunderstood my attorney of record's instruction
regarding the signing and commissioning
of the
founding affidavits.
3.2
Save for Mr C Smith's confirmatory affidavit, the founding
affidavit and the other confirmatory affidavits were signed before
and
in the presence of Captain L Vertue, a commissioner of oaths on 5
July 2017.
3.3
I inadvertently inserted the date of 28 June 2017 in the
founding affidavit. The affidavits were however all signed on 5 July
2017.
3.4
I was not aware that the affidavits could not be commissioned
before Captain Leon Vertue as he is a family member of the Mr C and
A
Vertue.
3.5
I also confirm that I was unaware of the fact that the
deponents of the confirmatory affidavits had to sign their respective
confirmatory
affidavits in the presence of a commissioner of oaths.
3.6
I attach hereto a complete set of affidavits, the contents of
which are identical to the founding and confirmatory affidavits
attached
to the notice of motion dated 18 July 2017, now correctly
signed and commissioned before an independent commissioner of oaths.
3.7
7
I submit that my failure to properly commission the
affidavits were not mala fide or deliberate, but merely a
bona
fide error. I was advised that the affidavits must be
signed as a matter of urgency and in my haste to have same signed, I
forgot
the advice of my attorney regarding the signature of same.
"
[21]
It
is trite that a Commissioner of Oaths shall not administer an oath or
affirmation relating to a matter in which he/she has an
interest.
[5]
In paras 28 (2), 29 and 30 of RUMARCH INVESTMENT
HOLDINGS (PTY) LTD v OLD FASHIONED
FISH
AND CHIPS
[6]
Msimeki J dealt with the formalities not complied with and resolved
that it would be prudent and in the interests of justice that
no
evidence is disregarded. I share the same sentiments.
In
casu
properly
commissioned founding and confirmatory affidavits were filed.
FACTUAL
BACKGROUND
[22]
Mr Julian Wayne Hendry Van der Watt, the deponent to the founding
affidavit, is the director of PAW ISS, a security business company in
Kimberley, Schmidtsdrif and Windsorton since 2015 having
eighteen
clients. It is a registered service provider in terms of s 21 of the
Act with its registration certificates issued on
30 July 2015.
[23]
The applicant fears that Koen would use its business' confidential
information,
operating, pricing and costing structures to his
advantage as a result of his employment and involvement with the
applicant. He,
according to the applicant, is not only in breach of
the alleged restraint agreement but also acts in contravention of the
Act,
hence the restraining order from operating a similar business in
Kimberley, Windsorton and Schmidtsdrif to a maximum of 12 months.
Otherwise the applicant's 47 employees would have to be retrenched
due to economic decline in the said business in Kimberley.
[24]
During November 2016 PAW ISS and Koen reached an agreement that Koen
would be appointed as director of marketing and operational services
and a shareholder of the shares in the applicant on payment
of R200
000-00 to expand its business. The purchase price would be calculated
at 25% of the value of the business to be determined
by the
applicant's auditors and that a deposit of Rl 00 000-00 would be
payable on the date of signature of the agreement. This,
according to
Koen, did not materialise. He disputes that he is an. employee of the
applicant. He contends that no restraint of
trade clause was
incorporated in the agreement. On 28 November 2016 he paid the
required deposit into Van Aardt's bank account.
[25]
On 11 February 2017 PAW ISS held a meeting with its managing
employees,
Messrs P van Aardt, C and A Vertue, Koen and JWH Van der
Watt. During the meeting it was suggested that a restraint of trade
agreement
should be finalised as a matter of urgency. The minutes of
the meeting (Annexure "PAWS") confirm this. Notably, the
alleged
agreement does not form part of the minutes of the meeting
but according to PAW ISS the parties agreed in the terms as contained
in paras 5.4.1 and 5.4.2.1 of the founding affidavit thus:
"5.
4.1 Any employee or director shall for a period of 1 year from date
of resignation for whatsoever reason and in Kimberley,
Schmidtsdrif and Windsorton be prohibited from engaging in the
establishment of a business, directly or
indirectly in competition with the applicant, as a shareholder,
partner, member of a close corporation, director
of a
company or in any other capacity,·
5.4.2.1
Any employee or director shall for a period of 1 year from date of
resignation for whatsoever reason and in Kimberley, Schmidtdrif
and
Windsorton, be prohibited from engaging with any clients and
employees of the applicant.
"
[26]
It is common cause that Ms Yolande Koen, Koen's wife who practises
as
an attorney, was mandated to draft the said restraint of trade
agreement. PAW ISS states that prior to finalisation of the restraint
of trade agreement the relationship between the applicant and Koen
went sour and on 04 May 2017 Koen left PAW ISS' employ without
notice. On 18 May 2017 Van der Watt learned that Koen had started a
security company business called Anandis Services, trading
as MK8 as
alluded to earlier. He alleges that he received information that Koen
offered to provide Mr C Smith, an employee of the
applicant's client,
security services at a lesser rate thereby undercutting its tariffs
by one of its employees, Mr Andreas Fundu,
a specialised guard in its
employ left and joined Koen's security company R20-00 per guard per
shift.
[27]
On 21 May 2017 Smith told Van der Watt that Koen informed him of
one
of PAW ISS' guards was under the influence of alcohol whilst on duty
which he alleges was untrue. PAW ISS alleges that Koen
continues to
entice his employees to join his business. Mr Andreas Fundu, a
specialised guard in its employ and one of its employees,joined
Koen's security company. This conduct, it argues, adversely affects
its business. According to Van der Watt, Koen also offered
Messrs
Andrew Letholo and C Makoti, other employees of PAW ISS and promised
them improved salaries. Indeed on 26 May 2017 they
left the
applicant's employ.
[28]
On
22 May 2017 PAW ISS' attorneys of record addressed a letter to Koen
warning him to desist from interfering with its clients and
employees
threatening him to sue him if he persisted with this conduct. On 23
May 2017 Koen's attorney of record responded giving
the applicant
three weeks from the date of notice in terms of s 345 of the
Companies Act
[7]
to settle an
amount of R123 356-44 due to Koen by the applicant failing which an
application for the liquidation of its company
would be initiated.
[29]
On 15 June 2017 Mr Henk Van der Westhuizen, the area manager of
BKB
and a client of the applicant, informed Van der Watt that he was
contacted by Koen requesting that BKB transfer its business
to his
thereby resulting in a loss of RI 7 000- 00 per month. Van der Watt
alleges further that he was again contacted by Mr L
Karrenmaker, the
sport co-ordinator at Diamantveld High School, that Koen contacted
him asking him to also transfer his business
thereby withdrawing it
from the applicant alleging that its service is of poor quality. On
15 June 2017 Van Der Watt says he telephonically
contacted Koen and
reprimanded him to refrain from contacting his clients thereby
damaging his company's reputation. However, Koen
did not take heed of
the warning, the argument goes.
[30]
The applicant asserts that Koen could conduct his security company
business
anywhere in the country save for Kimberley, Schmidtsdrif and
Windsorton. It argues that Koen is not registered with the private
security service provider which is denied by Koen.
[31]
In response to the allegations Koen submits that Van Aardt
represented
to him that the applicant's company projected turn over
for 2017 was R6 000 000-00 and Koen showed interest in the business
which
appeared lucrative. The applicant proposed that Koen becomes a
director and shareholder of its business as opposed to being a
shareholder
in the applicant's K9 division, a part of the security
services rendered by the applicant. His experience in the diamond
mining
industry and his business connections within the industry
attracted the applicant. In the meantime Koen left his employ at
Mentor
Investments and waited for his appointment as director with
PAW ISS. He disputes that the terms of the restraint of trade
agreement
were discussed at the meeting as alleged by the applicant.
He also disputes that he was employed by the applicant.
[32]
Koen alleged that he later discovered that the applicant's business
was
not as lucrative as Van Aardt made him to believe. He also
learned that the Vertues and Van Aardt resigned from the applicant's
employ on 23 August 2016 whilst they represented to him that they
were directors of the applicant. This remains undisputed. Koen
refers
to the applicant's business as
'amateurish'.
With this
discovery, he decided to have nothing to do with PAW ISS. He states
that he has been rendering services to Anandis Security
Services and
Cleaning CC. He denies enticing any of the applicant's employees. He
also denies that he was given formal training
by the applicant. He
contends that he cultivated his existing contacts that he had prior
to his involvement with the applicant
and represent no threat to any
proprietary interests of the applicant. He concludes that the
applicant's allegations are aimed
at preventing him from being
economically active as no restraint of trade agreement exists between
them.
[33]
The issue for determination is whether Koen is in breach of a verbal
restraint of trade agreement as alleged by the applicant which it
insists is reasonable and does not unreasonably interfere with
Koen's
constitutional rights. On the other hand Koen persists that he is not
party to a restraint of trade agreement. He urged
me to dismiss the
application with costs.
[34] Ms
Stanton concedes that the first respondent was neither employed nor
trained
by the applicant thereby confirming the version of the first
respondent. She further conceded that the minutes of the meeting held
on 11 February 2017 do not have reference or details of the alleged
restraint of trade agreement. This reinforces the case of the
first
respondent. Ms Stanton confirmed that the agreement was in the
process of being drafted but contends that the terms would
have been
agreed upon. This is in my view mere conjecture. She further submits
that there is no dispute of fact in this matter.
[35]
Koen's case has been that his wife was mandated to draft and finalise
a restraint of trade agreement and prior to its finalisation his
relationship with the applicant soured. This is also confirmed
by the
applicant. From the minutes it clearly shows that the intention of
the parties was to have the agreement in writing. This
was confirmed
by his wife in her confirmatory affidavit dated 28 July 2017. Mr
Aswegen, on behalf of Koen, argues that there are
disputes of fact
that cannot be resolved on paper. I agree. He submits that
substantial non-compliance with the Regulations Governing
the
Administering of an Oath or Affirmation (supra) is sufficient ground
for the Court to dismiss the application.
[36]
On the applicant's version it was the intention of the parties that a
written document would contain the contract/agreement. The first
respondent on the other hand contends that such contract/agreement
would not be said to be fully executed until the consent of the
parties had been expressed by the signature on the document
constituting
the written agreement.
[37]
Notably, there is no explanation why the most important part,
'the
conclusion of an oral restraint of trade agreement'
is omitted
from the minutes. What appears from the minutes is that Pierre Van
Aardt asked Koen if he knew when he would have money
ready to buy in
and whether the restraint of trade agreement had been put in place.
Charl Vertue requested that the agreement be
put in place with
immediate effect.
[38]
In
BASSON
V CHILWAN AND OTHERS
[8]
Eksteen JA held:
"The
paramount importance of upholding the sanctity of contracts, without
which all trade would be impossible, was again stressed
by this Court
in Sasfin (Pty) Ltd v Beukes
1989 (1) SA 1
(A) at 9B-C, where
Smalberger JA remarked inter alia that:
'The
power to declare contracts contrary to public policy should be
...
exercised sparingly and only in the clearest of cases, lest
uncertainty as to the validity of contracts result from an arbitrary
and indiscriminate use of power.
'"
[39]
It
is generally accepted that the restraint will be considered to be
unreasonable, and thus contrary to public policy, and therefore
unenforceable, if it does not protect some legally recognisable
interest of the employer but merely seeks to exclude in order to
eliminate competition.
[9]
[40]
In determining reasonableness or otherwise of the provision of the
restraint of trade Nienaber JA in Basson
supra
set out four
questions that should be asked when considering reasonableness
of a restraint at 767G-H thus:
"(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 objected? Where the interest of the party sought to
be restrained weighs more than the interest to be protected,
the
restraint is unreasonable and consequently unenforceable
"
[41]
In
SIBEX ENGINEERING SERVICES (PTY) LTD
V VAN WYK 7
&
ANOTHER
[10]
Stegmann
J held that:
"The
proprietary interests that can be protected by such a restraint were
essentially of two kinds. The first kind consisted
of the
relationships with customers, potential customers, suppliers and
others that go to make up what is compendiously referred
to as the
trade connection of the business, being an important aspect of its
incorporeal property known as goodwill.
The second
kind consisted of all confidential matter which is useful for
the carrying on of the business and
which could therefore be used by
a competitor, if disclosed to him, to gain a relative competitive
advantage. Such confidential
material is sometimes compendiously
referred to as "trade secrets".
[42]
In
TOWNSEND
PRODUCTIONS {PTY) LTD v LEACH
[11]
Erasmus
AJ held that for information to be confidential it must comply with
the following requirements:
"First
of all ...the information must not only relate to, but also be
capable of application in, trade or industry. Secondly,
the
information must be secret or confidential. The information must
accordingly
-
objectively determined
-
only be
available, and thus known, to a restricted number of people or a
closed circle; or, as it is usually expressed by the Courts,
the
information "must be something which is not public property or
public knowledge". Thirdly, the information must,
likewise
objectively viewed, be of economic (business) value to the plaintiff"
[43]
In casu
it is not clear what confidential information was of
economic value to the applicant that was disclosed to Koen that he
allegedly
gained by his involvement with the applicant. No factual
evidence regarding customer or potential customer lists were provided
and no detail of what methods of operating, pricing and costing
structures were referred to. The applicant claims to have a list
of
customers which it did not attach to its papers. There is no
allegation that while Koen was involved with the applicant he had
access to customers so as to establish some kind of relationship with
them. It is conceded that he did not receive any formal training
or
induction courses from the applicant. It is also not disputed that he
came with experience in the security business, had contacts
and
skills from the mining industry for example, GDB Consulting
Engineers, Breeze Court Investments encompassing a number of diamond
mining work sites under Wederberg and Oryx Plant and Graven Mining.
The following facts are also undisputed:
43.1
That Koen was involved with the applicant for a brief period of
time;
43.2
That he came and left with his experience in the security services;
and
43.3
That there is neither speciality nor exclusivity about the
applicant's business.
Mr
Aswegen argues that taking into account the applicant's concession
that there was no employment relationship between the applicant
and
the first respondent shows that there is no recognisable interest of
the employer (the applicant
in casu)
but it seeks to exclude
competition because of the skills and connectivity that the first
respondent has with the mining industry.
[44]
For PAW ISS to now say that
'it was agreed between all the people
present at the meeting that the restraint of trade would be drafted'
in the terms specified in
para
25
supra,
cannot
stand. This is, in my view, just an indication that the parties
intended to have a restraint of trade agreement in writing
but none
was concluded. It is also unclear who of the people present in the
meeting took the minutes. There is also no argument
that the minutes
do not convey accurately what took place in the meeting. In my view
there was no agreement in place, hence Ms
Koen had to prepare a
written agreement. The recording of the conversation between Koen and
an unnamed employee of the applicant
was not disclosed.
[45]
PAW ISS stated that it had eighteen clients but did not mention who
they
were. It alleged that it commenced its business in 2015 but if
one has regard to Annexure "MK12" it clearly shows in a
facsimile dated 06 March 2017 that its first financial year ended on
28 February 2017.
[46]
Koen admits that he provided GDB Mining
Services with a quote on
behalf of Anandis which he procured from PAW ISS during May 2017. He
disputes undercutting the applicant's
tariffs and states that
Anandis' quote was R39 000-00 more than the applicant's. He admits
that he sought to procure Diamantveld
High School but denies that
Diamantveld High School is the applicant's client. The invoice
attached by the applicant is over a
year old and shows that it
rendered services to the school for only two hours. He confirms that
he informed Mr Smith that one of
the applicant's security guards was
under the influence of alcohol on duty on invitation of Mr Smith, an
employee of GDB Mining/Consulting.
He nevertheless denies that on
15 June 2017 Van der Watt contacted him telephonically warning him to
refrain from damaging
the reputation of the applicant' s
business. Van Aardt did. He also denies enticing any of the
applicant's employees
but that those that left did so on their own
accord because they were not content with their work conditions.
[47]
PLASCON-EVANS
PAINTS LTD v VAN RIEBEECK PAINTS (PTY) LTD
[12]
finds
application wherein Corbett JA stated that:
"It
is correct that, where in proceedings on notice of motion dispute of
fact have arisen on the affidavits, a final order,
whether it be an
interdict or some other form of relief, may be granted if those facts
averred in the applicant's affidavits which
have been admitted by the
respondent, together with the facts alleged by the respondent,
justify such an order.
"
[48]
In
REDDY
v SIEMENS TELECOMMUNICATIONS (PTY) LTD
[13]
Malan AJA stated:
"[10]
Magna Alloys and Research (SA) (Pty) Ltd v Ellis
[1984] ZASCA 116
;
[1984 (4) SA 874
(A)}, described as a landmark decision, introduced a significant
change to the approach of the courts to agreements in restraint
of
trade by declining to follow earlier decisions based on English
precedent that an agreement in restraint of trade is prima facie
invalid and unenforceable. In English law, a party seeking to enforce
such agreement has to show that the restraint is reasonable
as
between the parties while the burden of proving that it is contrary
to public policy is incumbent on the party alleging it.
Magna Alloys
reversed this approach and held that agreements in restraint of trade
were valid and enforceable unless they are unreasonable
and thus
contrary to public policy, which• necessarily as a consequence
of their common-law validity has the effect that a
party challenging
the enforceability of the agreement bears the burden of alleging and
proving that it is unreasonable.
"
[49]
I find it difficult to agree with the applicant that the interests
that it
seeks to protect could be regarded as qualitative and
deserving of protection. In my view, it seeks to prevent the first
respondent
from competing with him in the security business. I
therefore cannot find that the restraint is reasonable in the
circumstances.
The applicant has, in my view, not managed to convince
me that an oral restraint of trade agreement exists between the
parties.
Therefore its application falls to be dismissed.
COSTS
[50]
What remains is the issue of costs. Ms Stanton argues that I should
order costs against
the first respondent thereby showing displeasure
for objecting the application for the amendment of the notice of
motion. She stated
that the applicant should be ordered to pay the
costs that were reserved previously when it withdrew the Rule 28 (1)
notice dated
06 September 2017. In this instance the applicant
tendered the costs. As far as costs of this application are concerned
she argues
that the applicant served the replying affidavit before
the matter was heard and so no inconvenience was caused to the first
respondent.
[51]
Mr Aswegen in response submitted that the applicant should be ordered
to pay
the costs on a scale as between attorney and client due to the
flagrant abuse of the court process and the fact that the applicant
did not take the court into its confidence by selectively placing the
facts.
[52]
The
purpose of an award of costs to a successful litigant is to indemnify
him/her for the expense to which he/she has been put through
having
been unjustly compelled to initiate or defend litigation.
[14]
The matter of costs is a matter wholly within the discretion of the
court but this is a judicial discretion and must be exercised
on the
grounds upon which a reasonable person could have come to the
conclusion arrived at.
[15]
Costs on attorney and client scale are punitive in nature.
[53]
The applicant initially approached this court on an urgent basis
thereby requesting
it to condone its non-compliance with the Rules.
It failed to show that the matter was urgent and why it could not be
granted the
relief sought in the ordinary course. It later abandoned
urgency and failed to comply with the Uniform Rules of Court. In my
view,
an award of costs on attorney and client scale is justified in
the circumstances.
In
the circumstances I grant the following order:
The
application is dismissed with costs on a scale as between attorney
and client.
BM
PAKATI
JUDGE
On
Behalf of the Applicant:
ADV STANTON
Instructed
by:
Engelsman-Magabane
On
Behalf of the Respondent: ADV VAN
ASWEGEN
Instructed
by :
Duncan & Rothman
[1]
Superior Court Practice at B1-178
[2]
Regulation 7 (1) (Published inthe GN Rl258 in GG 3619 of21 July 1972
as amended by GN 1648 in GG 5716 of 19 August 1977 GN Rl428
in GGG
7119 of 11 July 1980 GN R774 in GG 8169 of23 April 1982
[3]
1977 (4) SA 135
(W) at 137E-F
[4]
[1998] JOL 1832
(SE) at page 7-8
[5]
Regulations Governing the Administering of an Oath ss 7 (1)
supra
[6]
Unreported judgment by Msimeki Jin the North Gauteng Division,
Pretoria: Case No. 21168/2014 delivered on 25 March2015
[7]
Act 61 of 1973
[8]
[1993] ZASCA 61
;
1993 (3) SA 742
(A) at 762H-I
[9]
Automotive Tooling Systems (Pty) Ltd v Wilkens & Others
2007 (2) SA 271
(SCA) at 277G-278A
[10]
1991 (2) SA 482
(T) at 502D-E
[11]
2001 (4) SA 33
(C) at 53J-54B
[12]
[1984] ZASCA 51
;
1984 (3) SA 623
(A) at 634
[13]
2007 (2) SA 486
(SCA) at 493E-F (para 10)
[14]
Texas Co (SA) Ltd v Cape Town Municipality
1926 AD 467
at 488
[15]
Merber v Merber
1948 (1) SA 446
(A) at 453