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[2016] ZAGPPHC 1113
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Reirits CC v Carrim (68286/2015) [2016] ZAGPPHC 1113 (3 November 2016)

REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
DATE:
3/11/16
CASE
NO:
68286/2015
REIRITS
CC.

APPLICANT
AND
MOHAMED
SALIM ABDOOL
CARRIM

RESPONDENT
JUDGMENT
THOBANE
AJ,
Introduction
[1]
On 25 June 2014 the respondent, an accountant, sold his accounting
practice that traded as
"M
S
Carrim
&
Company"
to the applicant for the sum of
R2.1 million. The agreement the parties concluded for the sale of the
business provided that the
sale included;
1.1.
The trade name "M S Carrim and Company";
1.2.
The goodwill of the business;
1.3.
Any brand names or patents; and
1.4.
The clients of the business.
[2]
Initially applicant purchased 65% of the members interest in the
entity known as "M S Carrim and Company". The respondent

retained 35% of the members interest.
[3]
On 7 July 2014 the applicant changed its name to Reirits CC. On 26
September 2014 the parties agreed to go their separate ways.
The
remaining 35% of members interest held by the respondent was
purchased from him for the sum of R1.1 million.
[4]
The parties concluded an  agreement  which  incorporated
restrain  of trade provisions. Clause 10
of the sale
agreement stated in relation to the respondent;
"........shall
not, for a period of 3 years from the EFFECTIVE DATE be interested or
engaged, whether as a proprietor, partner,
director,
shareholder,    employee,   member
of   a
syndicate
or
otherwise
directly
or
indirectly
howsoever
in
any b
u
si
n
ess
which carries on
in competition
to
"THE
BUSINESS"
hereby sold and within a
50
km radius of
the
business except
as
employee and/or
member
of
MS
Carrim
Secretarial
CC. "
[5]
In this application the applicant seeks an order in the following
terms;
5.1.
Restraining  and   interdicting  the
respondent  from
utilizing  the
trading
name, "M S Carrim and Company", together with  its
logo "MSC";
5.2.
Restraining the respondent from passing off his own business as "M
S Carrim and Company";
5.3.
Restraining the respondent from competing with the applicant;
5.4.
Directing the respondent to pay the costs of this application.
Applicant's
case
[6]
The applicant contends that the respondent  is continuing  to
use the trade name M S Carrim and Company, unlawfully,
in
breach of the agreement the parties concluded.
6.1.
On 13 July 2015, applicant wrote a letter to the respondent
requesting him to stop using the
said trading name. In that letter
the applicant drew the respondent's attention to a clause in the
agreement which was inserted
at the respondent's request to the
effect that the applicant was to discontinue the use of the trading
name. That clause reads
as follows;
"SNYMAN
may
continue
to
use
the
trading
name
of
MS
Carrim
& CO
for
another
six
months
where
after
SNYMAN
may
not
use
this name
directly
or
indirectly and
the
reference to
MS
Carrim
& Co
must
be
removed
from
all
stationary
and
marketing
signs.
"
6.2.
Another letter was addressed to the respondent on 17 July 2015. In
the letter the respondent
was again informed that his continued use
of the logo and the name was unlawful. The respondent replied the
same day. In his letter,
he asserted that he was entitled to the use
of the name. In fact, his letter bore the disputed trading name as
well as the logo,
on its letterhead.
6.3.
Further correspondence was exchanged between the parties however the
respondent failed to give
an undertaking that he will not utilize the
name "M S Carrim and Company" to conduct business.
6.4.
In July 2015 the applicant became aware, through one of its clients,
that the respondent had
approached some clients with the view to
solicit business. The respondent contends that the respondent made
use of the same name
and logo and that such use was not authorized.
The applicant contends therefore that the respondent is unlawfully
passing off his
business as that of the applicant.
6.5.
The applicant is of the view that there is a protectable interest and
that should the respondent
not be held to the restraint of trade its
client base will be eroded and its name, goodwill and reputation will
be harmed.
6.6.
The applicant is seeking a declarator, an interdict plus a punitive
order of costs.
Respondent's
case
[7]
The respondent contends that three issues are to him critical,
namely, invocation of the arbitration clause, ownership of the
name
as well as the failure by the applicant to make out a case for an
order of restraint.
7.1.
The respondent correctly abandoned the line of attack that related to
arbitration and stated
that he was prepared for the matter to be
adjudicated upon and finalized by this court;
7.2.
The respondent does not challenge the manner in which his accounting
practice was purchased.
He states furthers that the purchase of the
business included the trade name and any brand or patents.
7.3.
That when the parties agreed to part ways, it was agreed that the
clause that follows below,
be incorporated into the agreement;
"SNYMAN
may
continue
to
use the
trading name
of
MS Carrim
&
CO
for
another six months
where
after SNYMAN may
not
use
this
name
directly
or
indirectly
and
the reference to
MS
Carrim
& Co
must
be
removed
from
all
stationary
and marketing
signs.
"
7.4.
The respondent is further seeking rectification of the agreement to
the extent that
the applicant is interpreting it to mean the contract
concluded between the parties, prevented the deponent to the
affidavit, Gerhard
Snyman, personally, from using the disputed name,
but did not bind the applicant.
7.5.
The respondent denies that it was agreed that he would not be
entitled to use the
name M S Carrim and Company. He states that the
agreement was to the effect that the applicant or Snyman would not
use the name.
He is of the view that he was not
prevented
from using the name. He could not use the name only in the course of
business.
7.6.
That although there is a restraint of trade provision in the
agreement, it did not contemplate
restraining him from using the name
or the logo in a "non-competitive environment". All it did
was to restrain him from
entering into a competing business.
7.7.
The respondent further denies that the applicant has made out a case
for an order for enforcement
of a restraint of trade provision of the
agreement between the parties. He alleges that a reach has not been
established, that
the applicant relies  on  hearsay
evidence and that in any event he is giving an unconditional
undertaking to abide by
the restraint of trade.
The
Law
[8]
The requirements for a final interdict are trite and have been
restated in many cases. In
Setlogelo v
Setlogelo
1912 AD 221
at 227 Innes JA said:
"The
requisites for the right to claim an interdict are well known; a
clear right, injury actually committed or reasonably
apprehended, and
the absence of similar protection by any other ordinary remedy."
[9]
The relief cannot be granted if there are disputes of facts (i.e a
genuine dispute), whereby the applicable test and the correct

approach to be followed will be as set out in
Stellebosch
Farmers Ltd
v
Stellenvale
Winery
(Pty}
Ltd
Winery
1957
(4)
SA
234
(C)
and well explained in
B
H  Water  Treatment
(Pty)
Ltd  v
Leslie
and
Another
1993
(1)
SA
47
(W)
at 55 A-E. In terms of this approach, a final interdict
is to be granted in motion proceedings if the facts stated by the
respondent,
together with the admitted facts in the applicant's
affidavit, justify such an order. The approach now coined the Plascon
- Evans
approach;
Plascon­ Evans
Paints
Ltd
v
Van
Riebeeck
Paints
(Pty)
Ltd [1984)
ZASCA
51
[1984] ZASCA 51
; ;
1984 (3)
SA 623
(A)
at
634H-
6358.
[10]
I now turn to consider what each requirement entails;
10.1.
CLEAR RIGHT
In
order to establish a clear right an applicant has to prove on a
balance of probability the right which she seeks to protect.
In
EDREI
INVESTMENTS
9
LTD
(IN
LIQUIDATION) v
DIS-CHEM
ES
(PTY)
LTD 2012(2)
SA 553
(ECP)
at 556C-D Eksteen J had this to say:
''The
right must of course be a right capable of protection. The party
seeking to establish a clear right so as to justify a final
interdict
is required to establish on the balance of probability, facts and
evidence which prove that he has a definite right in
terms of
the
substantive
law.
It
seems
to
me
therefore
that
where
the authorities refer to
a
clear
right, it
is
reference
rather to
a
right
which
is
clearly
established."
10.2.
AN INJURY COMMITTED OR REASONABLY APPREHENDED
Attestation
to show some action to exhibit  tampering  or  interference
with the applicant's rights or proof of a
well-grounded apprehension
that acts of the kind will be committed by the respondent is
required. A thorough reading of case law
shows the use of the word as
meaning an act of interference with, or an invasion of the
applicant's right and prejudice that follow.
The injury must be a
continuing one. In reference to a continuing injury Beadle CJ, in
FRANCIS
v
ROBERTS
1973(1)
SA 507
at 513 E, had the
following to say;
'The
injury with which this case is concerned is not the sort of injury
which can be described as an injury which has occurred once
and for
all. It is the type of injury which is capable of repeating itself
time and again. The defendant has not, even today, given
and
unequivocal undertaking that she will refrain from allowing the
infringement to occur again. Furthermore from the manner in
which the
defendant has defied the plaintiff’s rights in the past, it
cannot be said with any confidence that the plaintiff's
fears that
she will infringe his rights again are groundless. I do not think
that  this  is  a  case
where  there
is  any  obligation  on  the plaintiff  to
show,  on  a
balance  of probabilities
that  if  he  is  not granted an interdict
the defendant will again
infringe his rights. I draw attention to the
fact that proof by the plaintiff that the injury will again occur if
an interdict
is not granted, is not one of essential requisites for
the granting of an interdict  as  laid  down  in
Setlogelo's
case, supra...... This case shows that for this type of
injury an interdict is certainly, a proper remedy (513H)."
At
page 514G-H BEADLE CJ continued;
"Furthermore,
it must be borne in mind that this was not a case where the plaintiff
rushed into litigation. Had he, without
giving the defendant an
adequate opportunity of remedying the nuisance, simply gone, to law,
then I would have had very little
sympathy for him. But I have set
out the facts to show that the plaintiff exercised considerable
patience before eventually resorting
to legal action and right up to
the very end the defendant persisted in claiming that the plaintiff
had no right to demand that
she trim back her trees."
It
is sufficient for  an  applicant  to  show  that
there  is a  reasonable apprehension
of harm. An
applicant need not show that such injury will result. Such
apprehension must flow from the  conduct of the respondent.
10.3
ABSENCE OF ANY SATISFACTORY REMEDY
The
court will not, in general, grant an interdict when the applicant can
obtain adequate redress  in some other form of ordinary
relief.
This is because a final interdict is a drastic remedy and is in the
court's discretion. An applicant for a final interdict
must allege
and prove on a balance of probabilities that he has no alternative
legal remedy. In
KEMP,
SACS
&
NELL,
REAL
ESTATE  (EDMS)
BPK  V
SOLL
en
'n
ANDER
1986(1)  SA  673(0)
at  689F-H  the  question  that
arose  was whether the court had a discretion to refuse a
final
interdict where an applicant had succeeded in
establishing the legal requirements for the granting of the final
interdict. It was
held that the discretion of the court where
consideration of prejudice and convenience  are  of
importance was
bound up with the question whether the rights of
the party complaining could be protected by any other ordinary
remedy. It would
therefore seem that the discretion of the court to
refuse a final interdict is indeed limited to the availability of an
adequate
alternative remedy.
Analysis
[11]
If the applicant were to be said to have a clear right, such a right
would be derived from the two agreements the parties concluded.
The
applicant, in terms of  the contract concluded on 25  June
2014 purchased the business known as M S Carrim
&
Company, Professional Accountants, & Tax Consultants,
including the following assets;
11.1.
The trade name;
11.2.
The goodwill attached thereto;
11.3.
The fixed and movable assets;
11.4.
Any brand name or patents;
11.5.
The agreed and listed clients;
11.6.
The listed staff together with their conditions of employment.
[12]
From the simple reading of clause 1(a), it seems to me clear that the
applicant acquired the rights to the name of M S Carrim
&
Company. The applicant in the founding affidavit states that it owns
the name, logo and goodwill in terms of the agreement.
Not only that,
but also that a sum of R2.1 million was paid for same. In responding
to this assertion contained in the founding
papers the respondent
states the following in the opposing affidavit;
"save
to admit that the applicability of the restraint of trade, the
purchase price of R2. 1 m (but not that it was in respect
of the name
and logo, as per the later agreement) and that applicant might
possess the rights it states, but not in relation to
the subject
matter it raises the remaining content  hereof has been
addressed above and is denied."
It
is difficult to comprehend what the contention of the respondent is.
Either the applicant derives its right from the purchase
of the
business together with what attaches thereto as is contained in
clause 1(a) of the agreement or not. Nowhere in the papers
does the
respondent directly challenge the rights, particularly to  ownership,
that  the  applicant acquired
when the business was
purchased. The emphasis that the respondent seems to be harping on,
is the use of the name. Even on this
emphasis, the use of the name
had clearly established parameters, the existence of which do not
support the respondent's case.
Moreover, there is a clear difference
between ownership and the right to use.
[13]
It is my view that the applicant has unequivocally shown that it has
a clear right, not only of ownership, but also to the
use of the name
"M S Carrim & Company." I see no reason why the logo,
as well, that attaches to the business can
not form part of the right
so unequivocally delineated.
[14]
The respondent has in correspondence with the applicant, used the
name "M S Carrim & Company". He has also used
the logo
which bears the name any style "MSC". A letter from the
respondent dated 17 July 2015 is clear proof of the
fact that despite
the agreement the parties concluded, the respondent continued to use
both the name and the logo. However, a troubling
feature of the
respondent's intransigence that goes to the core of the respondent's
attitude, is his wrong belief to the effect
that the name "M S
Carrim & Company", belongs to him. In that letter the
following is stated;
"
................
the
name M
S
Carrim
&
Company
belongs
to Mohamed Salim
Abdool
Carrim
as
per clause
5.
6
of
the
agreement of sale and as a result I may use the name."
As
stated above clause 5.6 reads as follows:
"SNYMAN
may
continue
to
use
the
trading
name
of
MS Carrim
& CO
for
another
six
months  where
after
SNYMAN may
not
use
this
name
directly
or
indirectly
and
the reference
to MS
Carrim
& Co
must
be
removed
from
all stationary
and
marketing
signs."
Clause
5.6  is  not about  ownership  of the
name.  It is  rather  about  a
limitation
placed on the applicant to use the name as well as an injunction to
discontinue with its use after the expiry of six
months. To attach a
meaning imputing ownership is an epitome of ingenuity.
[15]
The use of the name in the letter dated 17 July 2015 is a clear sign
that an injury has been committed. Not only that. A false
and ill
conceived belief of ownership of and the assertion that that the name
may be used by the respondent, is a pointer to the
apprehension about
the use of the name in future. There is therefore not only proof of
an  injury  having been committed
but also a reasonable
apprehension of its continuation. Such an apprehension, is derived
from the past injury, its continuation
as well as a well grounded
belief that it will materialize in the future, based on the evidence,
is reasonable.
[16]
The respondent has been given adequate time to remedy the situation.
The question therefore, is whether in the present case
the
court can exercise any discretion other than granting the relief
applied for. Put differently, can applicant obtain adequate
redress
in some other form of ordinary relief? The respondent  has, in
one of his letters, "threatened" to reduce
the period of
the restraint of trade. In the opposing affidavit he has stated that
such an indication was nothing but a "threat".
He states
that he has not entered into any business that competes with the
applicant and that he does not intend to do so in the
future. The
respondent's word is worthless, if the provisions of the agreement
coupled with recent history is anything to go by.
It follows that no
alternative relief exits.
[17]
Lastly, the respondent contends that the agreement should be
rectified so as to reflect the common intention of the  parties.

This  contention does not even get off the blocks.
Costs
[18]
Both parties are seeking a punitive cost order against each other.
The applicant contends that the prayers were couched in
such a way
that an order of costs would have been sought in the event of
opposition. The applicant further argues that after the
respondent
had been served with the application, there was an approach from the
respondent's legal representative, who suggested
that an order be
obtained on an unopposed basis along the lines of the notice of
motion, but that the respondent not be liable
for costs. That despite
this proposal, the respondent nevertheless proceeded to oppose the
application. The opposition, it is argued,
is unreasonable, frivolous
and vexatious in light of the fact that the respondent has mounted no
credible opposition, had been
warned that his conduct of using the
name and logo was unlawful and has now belatedly made an undertaking
to abide by the restraint
of trade.
[19]
The general principle  underpinning the award of costs is that
an unsuccessful litigant should pay the costs of his/her
opponent and
generally, when a party institutes action but withdraws it, he/she
should pay the costs of the Defendant unless good
grounds exist. See
Germishuys
v
Douglas
Besproeiingsraad
1973(3)
SA
299
(NK).
Being a general principle, courts are flexible in their
approach  and retain a measure of discretion which is
judicially
exercised when appropriate.
[20]
The principles to legal costs were summarized as follows in
Goldfields Ltd and Others v
Motley
Rice LLC 2015(4) SA
299  (GJ)
at
paragraphs [29] and [32] :
"
The  starting  point  for  an  analysis  of
the  South  African  legal
position for legal
costs is the general rule that:
(a)
In
ordinary cases
costs
should follow
the
event
-
the successful
party is
ordinarily
entitled
to
costs
against
the
unsuccessful
party;
(b)
Costs
are
awarded
in
the
discretion
of
the
court
which may
in
appropriate
cases
not
award
costs
to
a successful
part
y
or
even
award
costs
against
such party........
The existence
of
a
discretion
of
the
court
in all  cases
(constitutional
and
otherwise)
ensures
that
the
court
is
always
in
a position
to balance
the
interest of the parties
and
to protect
its own process,
if
necessary  through  costs
orders.  In
this
context  there is
no
party
which is
a priori
immune
from
the
court's power
to
protect
its
own process
through
costs orders."
(my emphasis).
[21]
The Constitutional Court has summarized the  position
pertaining  to costs as follows in
Ferreira v
Levin
NO
and
Others 1996
(2)
SA
621 (CC)
at 3;
"The
Supreme Court has, over the years, developed a flexible approach to
costs which proceeds from two basic principles,  the
first
being  that  the  award  of  costs,
unless expressly   otherwise
enacted
is  in  the   discretion   of
the presiding judicial officer
and the second that the
successful party should, as a general rule, have his or her costs.
Even this second principle is subject
to the first. The second
principle is subject to a large number of exceptions where the
successful party is deprived of his or
her costs. Without attempting
either comprehensiveness or complete analytic accuracy, depriving
successful parties of their costs
can depend on circumstances such
as, for example, the conduct of the parties, the conduct of their
legal representatives, whether
a party achieves  technical
success only, the nature of the litigants and the nature of the
proceedings."
[22]
Apart from the fact that the applicant has, in my view made out a
case, the court must determine if it must protect its own
process
through an order of costs. The conduct of the respondent must attract
the court's criticism. The respondent in flagrant
disregard of the
agreement that the parties concluded, proceeded to make use of the
name M S Carrim and Company, after it was purchased
from him. He was
warned about the unlawful use of the name but he offered fanciful
explanations and excuses, and did not relent.
The respondent offered
not to contest the matter on condition each party pays its own costs.
When the applicant insisted on costs,
the respondent persisted in
opposing the merits of the matter. On the facts of this case there
appears to be no reason why the
respondent opposed the application.
The conduct of the respondent is the one which calls upon the court
to take a robust view and
show its disapproval and displeasure by
awarding a punitive cost order.
[19]
I therefore make the following order;
1.
The respondent is restrained and interdicted from utilizing the
trading
name, "M S Carrim and Company", together with
its logo "MSC"·,
2.
The  respondent  is restrained from  passing  off

his own  business as "M S Carrim and Company";
3.
The respondent is restrained from competing with the applicant;
4.
The   respondent is  directed  to  pay  the

costs  on  a  scale  as between attorney
and client
_______________________
SA
THOBANE
ACTING
JUDGE OF THE HIGH COURT
Date
of hearing                              :

22nd August 2016
Date
of judgment                            :

3rd November 2016
Applicant's
Counsel                       :

Adv.
First
respondent's  Counsel           :
Adv.