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[2017] ZAFSHC 205
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Rand Building Hydraulics (Pty) Ltd v Gilfillan (4164/2016) [2017] ZAFSHC 205 (26 October 2017)
FREE
STATE COURT, BLOEMFONTEIN
REPUBLIC
OF SOUTH AFRICA
Case
No.: 4164/2016
In
the matter between:
RAND
BUILDING HYDRAULICS (PTY)
LTD
Applicant
and
BASIL
CHARLES
GILFILLAN
Respondent
CORAM:
HEFER, AJ
JUDGMENT:
HEFER, AJ
HEARD
ON:
24 AUGUST 2017
DELIVERED
ON:
26 OCTOBER 2017
[1]
During October 2016, Applicant obtained an order in the following
terms:
(i)
Respondent is interdicted, prohibited and restrained from encouraging
enticing, persuading
or inducing any employee of the Applicant
directly or indirectly, to terminate his/her employment with the
Applicant;
(ii)
Respondent is interdicted, prohibited and restrained from, directly
or indirectly, advising
clients and/or customers of the Applicant
that he intends to or will compete directly or indirectly with the
Applicant;
(iii)
Respondent is interdicted, prohibited and restrained from, directly
or indirectly soliciting,
canvasing and dealing with clients and/or
customers of the Applicant or rendering any competitive services to
such clients and/or
customers;
(iv)
Respondent is interdicted, prohibited and restrained from, directly
or indirectly carrying
on or engaging in any business of which is
similar to and/or competing with and/or endeavouring to compete with
the Applicant's
business; and
(v)
Respondent is interdicted, prohibited and restrained from, directly
or indirectly associating
and/or concerning him with, engaging in any
firm, business, company, close corporation or other association which
carries on business
in competition with the business of the
Applicant:
(a)
Any time during the period of five years from 1 August 2014;
(b)
Anywhere within a 100 kilometre radius of the premises of the
Applicant and/or any other
branch of the Applicant or office of the
Applicant;
(c)
Whether as proprietor, principal. member, agent, partner,
representative, shareholder, director,
manager, employee, consultant,
advisor, financer, administrator and/or in any like capacity.
[2]
The Applicant now alleges that the Respondent has been acting in
breach of such order of Court and therefore launched the present
contempt of Court proceedings against the Respondent.
[3]
BACKGROUND
FACTS:
During
August 2014 an entity known as Bagill Services, duly represented by
the Respondent, sold, transferred and ceded to the Applicant
as an
indivisible whole and going concern, the risk in and benefit of
business involving the designing, manufacturing, installing,
repairing and maintaining of hydraulic services the business,
inter
alia,
comprising of:
(a)
the goodwill thereof;
(b)
the designated assets;
(c)
the stock; and
(d)
all contacts thereof.
[4]
Subsequent to such sale agreement, Respondent was further employed by
the Applicant in terms of a written agreement of employment
as Branch
Manager at the Free State Branch for the period 1 August 2014 until
13 August 2019. In terms of this agreement the Respondent
was to be
paid the monthly salary of R50 000,00. According to the Respondent,
the selling point to him was indeed that he was to
be employed as
described.
[5]
At the time of the conclusion of the employment agreement, Applicant
and Respondent also concluded a written restraint of trade
agreement,
the material expressed terms of which being as follows:
(a)
The restraint would become enforceable on termination of the
employment agreement;
(b)
The Respondent would for a period of five years from the date of
commencement of the employment
agreement be restrained from either
directly or indirectly:
(i)
encouraging, enticing, persuading or inducing any employee of the
Applicant to terminate
his/her employment with the Applicant;
(ii)
advising clients and/or customers of the Applicant that he intends to
or will compete directly
or indirectly with the Applicant; or
(iii)
soliciting or canvasing clients of the Applicant or rendering any
competitive service
to such client.
(c)
Respondent would not within the restrained period, whether as
employee, manager or
agent for any person, firm company
or body, corporate or incorporate, directly or indirectly:
(i)
carry on assist, financially or otherwise engage or concerned or
interested in;
(ii)
be a director of or shareholder or member or
partner
directly
or indirectly in; or
(iii)
act as a consultant or advisor
to
any firm, company or body which carries on business in the
territory which is similar to or competing with or endeavouring
to
compete with the Applicant's business.
(d)
The restraints would be deemed to be in respect of each part thereof,
entirely separate,
severable and separately enforceable and to
protect the financial interest of the Applicant; and
(e)
The restraints imposed would be deemed to be additional to and will
not in any way affect
the validity of any other restraint
imposed upon the Respondent in any other capacity, or under any other
agreement entered
into between the Respondent and other parties.
[6]
It is common cause that during February 2016, the parties further
signed a so-called
"separation agreement".
There
appears to be a dispute regarding the circumstances which led to the
conclusion of such separation agreement. According to
the Applicant,
the Respondent resigned from his employment with the Applicant. The
Respondent, however, alleges that on that particular
day, the
Applicant's human resources manager walked into his office
unannounced and in so many words made it clear to him that
the
Applicant no longer wanted him in their employment. According to the
Respondent it was further made clear to him that termination
of his
services was inevitable and would be unceremonious and that the path
of least resistance would be to retire. The termination
of the
Respondent's employment on 4 February 2016, is however common cause.
[7]
Applicant's application for an interdict during October 2016 was
based on Respondent allegedly enticing employees of the Applicant
and
attempts to persuade an employee of the Applicant to terminate his
employment with the Applicant; Respondent's alleged intention
to
compete with the business of the Applicant; Respondent's contacting
some of Applicant's customers; Respondent publishing false
and
malicious statements and Respondent allegedly competing with the
Applicant's business. On that basis the interdict was therefore
also
granted in favour of the Applicant during October 2016.
[8]
In the present application for contempt of Court, the Applicant
relies on certain actions of the Respondent after the interdict
have
been obtained. Such actions will be dealt with individually
hereunder.
SOLICITING
AND DEALING WITH APPLICANT'S CLIENTELE:
[9]
According to the Applicant during January 2017 a regular customer of
the Applicant returned to Mrs. Bester, an employee of the
Applicant,
a tax invoice rendered to such client. The tax invoice was apparently
defaced with handwritten notes. According to the
Applicant having
previously been employed by and having worked with the Respondent for
a total period of approximately eight years,
Mrs. Bester immediately
recognised the handwriting contained in the tax invoice as that of
the Respondent. Applicant also refers
to a further letter containing
a list of equipment and fittings provided by another regular customer
of the Applicant, being Mr.
Gert Eksteen. Mrs. Bester allegedly once
more recognised the handwriting contained on the letter provided by
Me. Eksteen as that
of the Respondent.
[10]
As a result of the aforesaid the services of a forensic handwriting
examiner, namely Me. Buckley were obtained in order
to
determine whether the Respondent was acting in breach of the
interdictory Court order by
inter alia
dealing with the
Applicant's clientele. According to a report by Me. Buckley, it was
confirmed that the handwriting on the tax invoice
was that of the
Respondent.
[11]
In his opposing affidavit the Respondent deals specifically with
these allegations pertaining to the handwritings contained
on the
documentation referred to. According to the Respondent, he has no
personal knowledge of the circumstances in which the first
tax
invoice was generated, why handwritten notes were made on it, etc.
Respondent denies in particular that the handwriting contained
on the
first tax invoice referred to, is his. Respondent not only denies
that such handwriting is his, but he took the impetus
of clarifying
the matter with the particular client. The Respondent then append a
written explanation provided by the sole member
of the client, being
Craft Hydraulics from which it is evident that the handwriting that
appears on the invoice is in fact that
of Craft Hydraulics' store
supervisor. Not only this member, but also the store manager then
states in confirmatory affidavits
that
it is
indeed not the
Respondent's handwriting which appears on the said invoice.
[12]
We therefore have the situation that on the one hand we have the
report of an expert who states that in her opinion the handwriting
which appears on the two invoices referred to, is indeed that of the
Respondent if it is compared, amongst others with the Respondent's
signature on the employment agreement between the parties. On the
other hand, we have the direct evidence, not only of the sole
member
of Craft Hydraulics from which it is evident that the handwriting
that appears on the invoice is in fact that of the
store
supervisor, Mr. Allan Ninneman but also of Mr. Ninneman himself which
confirms that it is his handwriting.
[13]
In
S v Gouws
1967 (4) SA 527
Eat 528D it was confirmed
that the prime function of an expert is to guide the Court to a
correct decision on questions falling
within the expert' specialised
field. Such an expert's decision should not, however, displace that
after tribunal which has a right
to determine the issue to be tried.
[14]
In
ANNAMA v CHETTY AND OTHERS
1946 AD 142
the Court
was
also faced with direct evidence which was
contradicted by
expert
evidence. On appeal Greenburg JA said as follows:
"But
I find it difficult to imagine
a
case where direct evidence
can be
so
conclusive as to render it permissible to disregard
expert evidence the conclusions of which are in conflict with the
direct evidence."
at
150.
[15]
In regards to a handwriting expert, Greenburg JA further said as
follows at 155:
"His
function is to point out similarities or differences in two or more
specimens of handwriting and the Court is not entitled
to accept his
opinion that these similarities or differences exists, but once it
has seen for itself the factors to which the expert
draws attention,
it may accept his opinion in regard to the significance of these
factors. Thus, to take an instance relevant to
the present case,
where the Court sees an absolute identity between two signatures, an
expert's opinion as to unlikelihood of such
an identity in two
genuine signatures is an opinion from which the Court may be guided.
If he is an honest witness and has
devoted many years to the
study of handwriting then his opinion on such
a
point may well
be of assistance to the
Court."
[16]
As far as the present expert's “
devotion
to
the study
of handwriting”
is concerned, she refers to her
qualifications as being attached to her report dated 7 February 2017
which, however, does
not form part of her report. I therefore
do not know anything about her qualifications and the time she has
studied and
"devoted to the study
of
handwriting.
Furthermore, whereas this is application proceedings,
the expert's opinion was not submitted to cross-examination. Most
importantly I do not see an absolute identity between the different
signatures as contended by the handwriting expert. For
instance, the 11s" in the word
"personal"
referred to in the second charge differs
according to me from the "s" as contained in the word
“
trainers”,
the “j” as contained
in 11Q1" and "Q3" does not appear to be the same one
as contained in both
charge 1 and 2 with reference to “
ST”
1
It is not necessary for me to deal with each and every
comparison. As stated I am not convinced that from what I can see
myself,
that it is indeed two identical handwritings.
[17]
The direct evidence of the relevant deponents referred to, is
therefore to be preferred to the effect that the handwriting
referred
to is indeed not that of the Respondent. As far as this point is
concerned, it is also significant that in his letter
dated 6 May
2017, Mr. Geyser, being the sole member of Craft Hydraulics, he
actually invites anyone, and by implication in particular
the
Applicant, to speak to the store supervisor, Mr. Ninneman regarding
the incident where Mr. Ninneman wrote on the particular
sales order.
Evidently the Applicant has chosen not to take up Mr. Geyser's
invitation whereas Applicant fails in totality to deal
with this
aspect in reply.
[18]
As far as soliciting and dealing with Applicant's clientele is
concerned, the Applicant refers to a further incident during
which a
certain Mr. Pieter du Plessis of
"AMS Engineers"
informed an employee of the Applicant that it was not possible to
collect a pump as the owner of AMS Engineers had given it
to
the Respondent during March 2017. In answer to these allegations, the
Respondent provides a comprehensive plausible explanation
for the
circumstances of such pump being handed to him which is again
confirmed in a confirmatory affidavit by a third person.
As
far as this contention by the Applicant is concerned, in reply the
Applicant fails to take it any further.
COMPETING
WITH THE APPLICANT'S BUSINESS:
[19]
As far as competing with the Applicant's business is concerned, the
Applicant employed the services of a private investigator
in order to
have the movements of the Respondent monitored during the period
January 2017 to 9 February 2017, therefore for a period
of
approximately one week. Such findings as contained in the
report by the private investigator, which will be dealt with
individually herein under, need to be considered:
19.1
Respondent's swimming pool services:
19.1.1
According to the investigations, despite the trade signage displayed
on the Respondent's motor
vehicle, advertising swimming pool
services, the Respondent at no stage attended at properties with
swimming pool
facilities. It needs to
be mentioned that the Applicant's reference to the report of
the private
investigator, also refers to the 2016 period, which
apparently was also at some stage investigated by the same
investigator. However,
for purposes of the present application, I can
only have regard to the period January/February 2017 referred to.
19.1.2
To this allegation the Applicant draws attention to the fact that the
report spans a
mere 11 days over the peak of the festive season. The
Respondent explains that it may be that he did indeed not visit any
of the
swimming pool clients within the period and that he
dropped-off certain swimming pool products at the work places of his
clients.
The Respondent then further attaches certain documentation
which confirms the purchase of certain swimming pool products.
19.2
Genflex
Hydraulic
Equipment:
In
regards to the alleged visit to Genflex Hydraulic Equipment, the
Respondent alleges that he did not visit Genflex to do business,
save
for purchasing fittings and hoses to repair the hydraulic car lift in
his workshop.
19.3
OFS Bodies, Virginia:
In
regards to the visit to OFS Bodies, Virginia, the Respondent again
does not dispute such visit, but provides the explanation
that he
went there to have his trailer fixed. According to the Respondent he
did not go there to do business with OFS Bodies.
19.4
Craft Engineering Works:
In
regards to Respondent's visit to Craft Engineering Works, the
Respondent explains that it is his building where he has his little
workshop.
19.5
Top Gear Engineering:
The
Respondent explains that Top Gear Engineering manufactured a steering
shaft for him for a tractor that was converted into a
go-cart for his
grandchild by the Respondent himself. Top Gear Engineering also
manufactured two rollers for his car lift.
[20]
In general, the Respondent further alleges that he has known the
owners of the relevant businesses for years and it may well
be that
he was popping in to make conversation or drink coffee as
"senior
citizens"
like himself often does. Respondent again disputes
that he has been doing business either directly or indirectly with
the entities
referred to, nor did he compete or seek to compete in
any way with the Applicant's business or seek to solicit business
from the
Applicant's clientele.
[21]
There are two further allegations pertaining to Respondent's alleged
soliciting and dealing with Applicant's clientele which
needs
to be considered. The first is the one regarding Mr. Eksteen's visit
to his premises. According to the Respondent, Mr. Eksteen
visited him
unannounced as his personal workshop at the Craft Engineering
Building to seek advice on hydraulic remotes for certain
tractors.
Respondent then gave him a list of items that he needed to purchase
from the Applicant and explained to him how it should
be installed.
What is important of this conversation is that it appears to be
uncontested that the Respondent indeed provided this
list in regards
to items which was to be purchased from the Applicant. Surely
providing Mr. Eksteen with a list to be obtained
from the Applicant
illustrates Respondent's intention not to compete in business with
the Applicant.
[22]
The last fact which needs to be considered is Respondent's admission
that he met with Mr. Farinah who has his own hydraulics
business in Welkom, called DC Hydraulics, during January 2017.
According to the Respondent, the reason for this meeting was because
Mr. Farinah apparently wanted to buy old stock from the Respondent.
[23]
At this stage it needs to be mentioned that all the allegations
pertaining to Respondent's alleged contravention of the Court
order,
were met head-on, by the Respondent in his opposing affidavit, as
correctly pointed out by
Mr. Van Aswegen,
appearing on behalf
of the Respondent. First of all the allegations contained in
Applicant's founding affidavit is indeed
as put by the
Respondent himself "...
little more than pure speculation
and barren of cogent
facts
and evidence".
The
Applicant made certain deductions from handwriting which appeared on
certain invoices. The Applicant made certain deductions
from the
presence of certain people at the premises of the Respondent
and the presence of the Respondent at certain
entities.
However, the Applicant does not provide any affidavit and
therefore any evidence that Respondent contravened
the terms of
the Court order. Even after the Respondent provided
explanations in regards to visits to and from certain people,
the
Applicant failed in totality to obtain affidavits from such persons
in an attempt to contradict the allegations by the Respondent.
This,
of course, will be only in regards to the deponents who have not made
confirmatory affidavits in regards to the allegations
by the
Respondent in his opposing affidavit. The Applicant merely wished to
rely on the speculations and deductions referred to.
[24]
Another aspect which need to be mentioned at this stage, is an aspect
which I raised with
Me. De la Hunt
at the hearing of the
matter. In the first application which was launched during October
2016, the Applicant referred to a letter
dated 18 March 2016 by Mr.
Adriaan du Plessis, the attorney acting on behalf of the Applicant,
addressed to the Respondent. In
this letter the Respondent is urged
to sign an undertaking in respect of the restraint of trade. In the
founding affidavit the
Applicant in that application. The Respondent
failed to respond thereto. However, as part of the present
application, the Applicant
attaches the same letter as well as
another letter dated 14 March 2016 in which the Respondent is brought
to terms. Apparently
the letter relating to the signing of an
undertaking was indeed supposed to be dated 18 March 2016. However,
the Respondent, through
his attorneys, Messrs Maree Gouws, now
attaches a letter in his opposing affidavit dated 18 April 2016 in
which the allegations
pertaining to the alleged breach of the terms
of the letter of appointment and restraint of trade. However, as
stated, this letter
has never formed part of the Applicant's founding
affidavits and has only been produced by the Respondent.
[25]
This omission in the present as well as the previous application by
the Applicant casts grave doubt about the Applicant's good
faith
which is expected in application proceedings.
[26]
Both parties referred me to the matter
Fakie N.O. v CCII
Systems
(Pty) Ltd
[2006] ZASCA 52
;
2006 (4) SA 326
SCA where
the current position in regards to contempt proceedings was
summarised by Cameron JA (as he then was). In particular
it was
stated that an Applicant must prove the requisites of contempt (the
order; service of notice; non compliance; wilfulness
and ma/a
fides
(beyond reasonable doubt)).
Me. De la Hunt
on
behalf of the Applicant argued that through the actions as alleged by
the Applicant, the Respondent has contravened, in particular
paragraph 3 of the order of restraint, which reads as follows:
"Respondent
is interdicted, prohibited and restrained from directly or indirectly
soliciting, canvassing and
dealing with
clients
and/or customers of the Applicant or rendering any competitive
service to such clients and/or customers."
[27]
In this regard she referred me, first of all, to the matter of
State
v Mhlungu and Others
1995 (3) SA 827
CC. According to her,
the Constitutional Court in this matter had the opportunity to
consider what is meant by the term
"deal with".
After
referring to the meaning which the new shorter Oxford English
Dictionary attributes to the term
"deal with",
the
Constitutional Court, however, did not go any further apart from
stating that the phrase has different nuances. The meaning
which the
new shorter Oxford English Dictionary, Volume 1 deals with is
described as
"be concerned with (a thing) in any way; busy
of
occupying
oneself
with,
esp
with
a
view
to discussion
or
refutation".
[28]
The Readers Digest Oxford
11Complet
e
Word
Finder"
sets out
"deal with"
as
"do
business with".
The
Mhlungu
-
decision
does not assist the Applicant at all.
[29]
It is necessary to interpret the order granted during October 2016.
In
Firestone South Africa (Pty) Ltd v Gentucuroag
1977
(4) SA AD it was held that the basic principles applicable to
constringed documents also applied to the construction of the
Court's
judgment or order. The Court's intention is to ascertain by
preliminary from the language of the judgment or order
as
construed according to the usual, well-known rules.
Furthermore, as in the case of a document, the judgment or order
and
the Court's reason for giving it must be read as a whole in order to
ascertain its intention.
[30]
In
Simond N.O. and Others v Mitsui and Company
Ltd and Ot ers
1970 (2) SA 475
WLD Wunsh J said the
following:
“
The
first
task
is
to
determine
the
content
of
the
Court order.
A
Court order defines what the Court requires to be done or not
done, so that the defendant or respondent,
or
in some cases
the world, may know it... The Court's intention must be ascertained
preliminary from the language of the order
as
construed
according to the usual rules for interpreting
documents.”
[31]
In the present matter it is clear that the Applicant approached the
Court for the relief as granted, for the purpose of protecting
its
interests, and in particular its pecuniary interest. It is common
cause that before the sale of the business by the Respondent
to the
Applicant, the Respondent was well-known in that particular field of
business. The restraint of trade agreement which was
concluded
simultaneously with the agreement of employment was indeed also
concluded with the object to prohibit the Respondent
from dealing
with and in particular doing business with clientele of the Applicant
in competition with the Applicant. It was also
on that basis that the
order of Court was granted during October 2016 which cannot be read
in any different manner.
[32]
Returning to the facts of the present application, as stated, the
allegations by the Applicant in regards to the actions of
the
Respondent with the exception of one, is based on mere speculation. I
cannot find as the Applicant wishes me to do to deduct
from the facts
as set out by the Applicant that the Respondent indeed “
dealt
with”
clientele of the
Applicant, especially whereas stated, the Respondent
meets the allegations
by the Applicant head-on, again with the
exception of one incident. As stated, the Respondent admits that he
met with Mr. Farinah
because Mr. Farinah wanted to buy old stock from
him. In my mind, with reference to the various meanings of “
doing
business with”
and “
dealing with”,
referred
to above, a person does business with the purpose of making a living
and securing an income. If, for instance a person
sells some of his
old furniture which he stored at home, that is merely to get rid of
the furniture and at least receiving some
form of compensation
therefore. When the Respondent met with Mr. Farinah to get rid of his
old stock, it was the same. Even if
that stock was part of the
"competition business"
of the Respondent by
negotiating and selling the stock to the other person, this was
actually not “
doing business"
with Mr. Farinah as
contemplated in the order of Court granted during October 2016.
Therefore there have been no contravention
of the terms of such order
and the application should therefore fail.
[33]
As far as the costs is concerned, it was argued on behalf of the
Respondent that whereas the application
is
a “
prototype
of
a
frivolous and vexatious application”.
The basic fact is
that the Applicant approached this Court without proper concrete
evidence. It was based on mere speculations and
deductions made by
the Applicant itself. No attempts were made after the opposing
affidavit had been filed to collect further concrete
evidence from
the deponents referred to by the Respondent in his opposing
affidavit. In those circumstances a punitive cost order
should be
granted.
Therefore
the following order is made:
ORDER:
The
application is dismissed with costs, which costs is to be paid on an
attorney-client scale.
___________________
J.J.F.
HEFER, AJ
On
behalf of the applicant:
Adv. C de la Hunt
Instructed
by:
Adriaan du Plessis Inc.
PRETORIA
On
behalf of the Respondent: Adv. W.
A van Aswegen
Instructed
by:
Hill, McHardy & Herbst Inc.
BLOEMFONTEIN