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[2015] ZAGPPHC 522
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Actom (Pty) Ltd v Coetzer and Another (85563/14) [2015] ZAGPPHC 522 (10 April 2015)
IN
THE REPUBLIC OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
CASE
NO: 85563/14
DATE:
10 APRIL 2015
In the matter
between:
ACTOM (PTY)
LIMITED
.......................................................................................................
Applicant
And
GERHARDUS
STEPHANUS
COETZER
.................................................................
First
Respondent
ERB TECHNOLOGIES
(PTY)
LTD
......................................................................
Second
Respondent
JUDGMENT
RAULINGA J
[1] The Applicant
seeks by way of an urgent application, the following relief:-
1.1 Directing that
the Respondents' application for leave to appeal dated 16 January
2015, as well as any application by the Respondents
to the Supreme
Court of Appeal for
leave to appeal, shall not suspend the operation or execution of the
order granted by Hughes J on 23 December
2014.
1.2 The order of 23
December 2014 of Hughes J shall be given immediate effect and shall
remain in force pending the outcome of any
appeal by the Respondents
against the order of Hughes J.
1.3 The costs of
this application are to be paid by the First and Second Respondents,
alternatively the costs of this application
be costs in any appeal
against the order of 23 December 2014 of Hughes J.
[2] On 23 December
2014, my sister Hughes J granted an order against the First and
Second Respondents as follows:-
2.1 Interdicting and
restraining the First Respondent for a period of 12 months from 1
November 2014 and in South Africa from^
2.1.1 directing or
indirectly competing with the Signalling Business of the Applicant or
being interested in any business which
trades in a field of activity
which is similar to Signalling Business of the Applicant;
2.1.2 becoming
engaged or interested, whether directly or indirectly, and whether as
an employee, proprietor, partner, shareholder,
agent, consultant,
financier or otherwise, in any company, firm business or undertaking
which carries on business in any field
of activity which is similar
to the Signalling Business of the Applicant;
2.1.3 soliciting any
business relating to the Signalling Business of the Applicant;
2.1.4 enticing away
from the Applicant, any customer or prospective customer of the
Applicant in regard to Signalling Business of
the Applicant;
2.1.5 persuading,
inducing, encouraging or procuring any employee of the Applicant at
any time during the previous 12 months, to
become employed by or
interested in any competing business or to terminate his or her
employment with the Applicant;
2.2 Interdicting and
restraining the First Respondent, for a period of 12 months from 1
November 2014, from being employed by the
Second Respondent.
2.3 Interdicting and
res' 'aining the Second Respondent for a period of 12 months from 1
November 2014, from employing the First
Respondent;
2.4 The First and
Second Respondents are to pay the costs of this application jointly
and severally.
[3] The Respondents
contend that the matter is not urgent on the basis that the Applicant
did not act reasonably in bringing the
matter to Court. However, one
must be alive to the fact that the order wts granted on the 23
December 2014 and the application
for leave to appeal was delivered
on 16 January 2015. The Applicant launched the urgent application on
the 5 February 2015 for
hearing on the 3 Mach 2015. In my view, the
15 Court days allowed to the Respondents for delivery of the
application is reasonable.
The restraint order expires on 31 October
2015. I don't intend to belabour the matter, and my ruling is that
the matter is urgent.
[4] The Respondents
sought leave to appeal against the judgment and order of Hughes J
granted on 23 December 2014. The Respondents'
application for leave
to appeal was heard on 27 February 2015 and on 2 March 2015 Hughes J
granted the Respondents leave to appeal
to the Supreme Court of
Appeal. Consequent upon the Respondents having brought an application
for leave to appeal, the Applicant
has brought an application in
terms of Rule 49(11) as read with Section 18(1) and (3) of the
Superior Courts Act 10 of 2013 ("the
Superior Courts
Act"
;) for an order granting the Applicant leave to execute the
order of 23 December 2014 (an order that the operation of the order
is not suspended).
[5]
Section 18
of
the Superior courts Act states as follows:
"18 Suspension
of decision pending appeal
(1) Subject to
subsection (2) and (3), and unless the court under exceptional
circumstances orders otherwise, the operation and
execution of a
decision which is the subject of an application for leave to appeal
or of an appeal, is suspended pending the decision
of the application
(2) Subject to
subsection (3), unless the court under exceptional circumstance's
orders otherwise, the operation and execution of
a decision that is
an interlocutory order not having the effect of a final judgment,
which is the subject of an application for
leave to appeal or of an
appeal, is not suspended pending the decision of the application or
appeal.
(3) A court may only
order otherwise as contemplated in subsection (1) or (2), if the
party who applied to the court to order otherwise,
in addition proves
on a balance of probabilities that he or she will suffer irreparable
harm if the court does not so ordr and
that the other party will not
suffer irreparable harm if the court so orders.
(4) If a court
orders otherwise, as contemplated in subsection (1)-
(i) the court must
immeciately record its reasons for doing so;
(ii) the aggrieved
party has an automatic right of appeal to the next highest court;
(iii) the court
hearing such an appeal must deal with it as a matter of extreme
urgency; and
(iv) such order will
be automatically suspended, pending the outcome of such appeal.
(5) For the purpose
of subsection (1) and (2), a decision becomes the subject of an
application for leave to appeal or of an appeal,
as soon as an
application for leave to appeal or a notice of appeal is lodged with
the registrar in terms of the rules."
[6] I am with the
Applicant that the facts in this matter are similar to those dealt
with by Sutherland J in Incubeta Holdings (PTY)
Ltd and Another v
Ellis and Another 2014 (3) S/A 189 (SGJ). I also agree that the test
for determining whether leave to execute
is no longer as per South
Cape Corporation (PTY) Ltd v Engineering Management Services (PTY)
Ltd 1977 (3) S/A 534(A) and it follows
that I will basL* the test as
decided in Incubeta.
[7] Section 18(1)
and (3) has introduced a new text. The test is twofold. The
requirements are:-
7.1 first, whether
or not "exceptional circumstances" exist; and
7.2 second, proof on
a balance of probabilities by the Applicant that:-
7.2.1 the Applicant
will suffer irreparable harm; and
7.2.2 the Respondent
will not suffer any irreparable harm - See Incubeta Supra.
[8] In regard to
section 18(3) the court has to make a determination of a balance of
convenience or a weighing-up to discern a preponderance
of equities.
The discretion is absent - Incubeta Supra.
[9] In Incubeta
Sutherland J found as follows on facts similar to the facts of this
matter:
"[25] Turning
to the circumstances of these litigants, what is relevant, in my
view, is the following:
• If the order
is not put into operation, the relief will, regardless of the outcome
of the application for leave to appeal,
be forfeited by Incubeta
because the short duration of the restraint will expire before
exhaustion of the appeal processes.
• The only
value in the relief is to stop the breach and protect legitimate
interests during the precise period of the next
four and a half
months. Unrebutted evidence in the affidavits alleges a breach is
taking place at this very time.
• Damages are
not an appropriate alternative remedy precisely because the very
relief obtained is posited on the absence of
such a remedy being
available. This places a restraint interdict in a different position
to other forms of relief, such as money
claims, where the aspect of
irreparable harm is a factor extraneous to the substantive relief
procured.
• Ellis will,
on the probabilities, be without work for four and a half months and
without pay. This will be financially detrimental.
•
Significantly, no allegation is made that Ellis or his family will
endure true hardship during this short period.
• If the appeal
is won, Ellis loss of earnings can be sued for, and the quantum is
feasible to compute, including the loss
of interest or lost -
opportunity cost of being out of funds, and any such interest
expended on borrowing for living expenses,
if necessary.
• Moreover,
security under rule 48(12) is available."
[27] Do these
circumstances give rise to 'exceptionality' as contemplated? In my
view the predicament of being left with no relief,
regardless of the
outcome of an appeal, constitutes exceptional circumstances which
warrant a consideration of putting the order
into operation. The
forfeiture of substantive relief of procedural delays, even if not
protracted in bad faith by litigant, ought
to be sufficient to cross
the threshold of 'exceptional circumstances'.
[28] The plight of
the victor alone is probably all that is required to pass muster.
Nonetheless, I am not unconscious of the undesirable
outcome that
relief granted by the court becomes a vacuous gesture. A court order
ought not to be lightly allowed to evaporate,
a fate which, seems to
me, would tend to undermine the role of courts in the ordering of
social relations.
[29] Furthermore, it
is plain form the summary of circumstances given above that the
applicants would indeed suffer irreparable
harm if the order is not
put into operation. Moreover, it is plain that Ellis will not suffer
irrepf-'able harm if the order is
put into operation. Although Ellis
in his answering affidavit complains that putting the order into
operation will render his right
of appeal meaningless, this is
incorrect for the reasons mentioned above; he cannot be without
practical relief. The sl8 test is
met on both counts of the second
leg."
I agree with the
finding of Sutherland J.
[10] The Applicant
contends that there are exceptional circumstances and that it will
suffer irreparable harm, and on the other
hand the Respondents will
suffer no irreparable harm. The Respondents aver that this contention
is wrong.
[11] I am enclined
to support the submissions by the Applicant that there is a short
duration between the launching of the appeal
and the restraint period
which is until 31 October 2015.
There is no doubt
that the Respondents' appeal against the judgment and order of 23
December 2014 will not be heard prior to the
expiry of the restraint
period on 31 December 2015. This means that if the urgent application
is not granted the Respondents will
have achieved what they have been
prohibited to do by the order of the 23 December 2014. This will
render the said order nugatory
and the enforcement by the Applicant
undertakings futile.
[12] The First
Respondent is aminable to disclosing to the Second Respondent the
Applicant's confidential information which can
cause potential harm
to the Applicant. In Incubeta it was held that damages are not an
appropriate remedy. It does not seem to
me that both the Respondents
are in a position to satisfy any damages - although the 2 Respondent
has intimated that it may pay
damages. Their problem with this
promise is that no security has been tendered. It is my view that the
irreparable harm must be
measured by a balance between the two
probabilities. It seems to me that the Applicant will be in a
position to satisfy whatever
damages the First Respondent may suffer.
There is no guarantee that both Respondents will satisfy the damages
which will be incurred
by the Applicant. The balance of probabilities
favour the Applicant.
[13] As an
experienced contracts manager for the last 43 years, the First
Respondent is still employable - on his own version he
has skills and
experience to can procure employment other than with the Second
Respondent. Further to that, the First Respondent
does not give
details in regard to seeking employment. The allegations of prejudice
are not supported by confirmatory affidavits
by his relatives.
[14] In the result,
I find that there is a short duration of restraint period until 31
October 2015. As a consequence the appeal
will not be heard prior to
the expiry of the restraint period on 31 October 2015 - these are
exceptional circumstances which exist
in this case. I also find that
the Applicant will suffer irreparable harm if the application is not
granted.
[15] In the
circumstances:
(a) The application
is granted.
(b) The costs of
this application are costs in any appeal against the order of the 23
December 2014 of
Hughes J.
TJRAULINGA JUDGE:
GAUTENG DIVISION, PRETORIA