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[2013] ZAGPPHC 92
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Tuscan Mood 179 (Pty) Ltd v ITEC Distribution (Pty) Ltd and Others (15767/13) [2013] ZAGPPHC 92 (2 April 2013)
REPORTABLE
IN
THE NORTH GAUTENG HIGH COURT,
PRETORIA
(REPUBLIC OF SOUTH AFRICAN
Date:
2 April 2013
Case
Number: 15767/13
In
the matter between:
TUSCAN
MOOD 179 (PTY)
LTD
.......................................................................................
Applicant
and
ITEC
DISTRIBUTION (PTY)
LTD
..........................................................................
First
Respondent
ITEC
HOLDINGS (PTY)
LTD
...........................................................................
Second
Respondent
ITEC
FINANCE (PTY)
LTD
..................................................................................
Third Respondent
EXTRA
DIMENSIONS 224 (PTY)
LTD
..............................................................
Fourth
Respondent
t/a
ITEC PRETORIA EAST
ITEC
CONNECT (PTY)
LTD
...................................................................................
Fifth
Respondent
JUDGMENT
A
B ROSSOUW A J
[1]
The matter came before me on 26 March 2013 and I reserved judgment.
The order was given on 2 April 2013. What follows, are my
reasons for
the order.
[2]
I agree with the submission made by Mr Lundell SC that the
application is not urgent. I shall nevertheless deal with the merits.
[3]
This is an urgent application to interdict the respondents from
unlawfully interfering with the relationship between the applicant
and its customers, from unlawfully competing with the applicant and
from unlawfully interfering in the applicant’s relationship
with its employees. The final relief that is sought is set out in
paragraph 2 of the applicant’s Notice of Motion. It reads
as
follows:
‘
2.
That the Respondents be interdicted and restrained from: -
2.1
Unlawfully interfering in the relationship between the Applicant and
its customers, as at 18 December 2012;
2.2
Unlawfully competing with the Applicant by inter alia making use of
its client lists, customer base details, contract information,
pricing details and financial arrangements and information, until
such time as any of the above falls within the public domain;
2.3
Unlawfully interfering in its relationship with its employees by
approaching same;’
[4]
Where a final interdict is sought on an urgent basis, proceedings may
be commenced by way of application even though a (real)
dispute of a
(material) fact is foreseen. (See Van Niekerk v Van Rensburg
1959 (2)
SA 185
(T) at 187H).
[5]
Real disputes of material facts have indeed arisen from the
affidavits. Motion proceedings concerned with final relief are all
about the resolution of legal issues based on common cause facts and
they cannot be used to resolve factual issues, because they
are not
designed to determine probabilities and in motion proceedings the
issue of onus also does not arise. (See National Director
of Public
Prosecutions (Pty) Ltd v Zuma (Mbeki and another intervening)
2009
(2) SA 279
(SCA) par 26). In terms of the Plascon Evans rule, the
‘common cause’ facts are those facts averred in the
applicant’s
affidavits, which have been admitted by the
respondent, together with the facts alleged by the respondent. A
final order can only
be granted if the ‘common cause’
facts justify such an order.
[6]
The ‘common cause’ facts in this application are the
following:
[7]
During December 2004 the applicant, ie Tuscan Mood 179 (Pty) Ltd
(‘Tuscan’), concluded a dealership agreement with
ITEC
Distribution (Pty) Ltd (‘ITEC’) (the first respondent) in
terms of which ITEC granted to Tuscan a non- exclusive
right to do
business in respect of ITEC branded photostat and business machinery
(‘the agreement’). ITEC branded products
are actually
Konica Minolta products rebranded as ITEC products for purposes of
distribution in South Africa through ITEC and its
dealers, which
included Tuscan.
[8]
The agreement between Tuscan and ITEC contained, inter alia, the
following terms:
1.
ITEC granted the right to Tuscan do business, which included the
right to sell, deal, supply, install, service, repair and maintain
ITEC products, including the supply of these products to end-users by
means of rental, hire-purchase, lease and such like agreements
concluded between such end-users and ITEC Finance (Pty) Ltd
(‘Finance’) (the third respondent).
2.
Tuscan was restricted to conduct its business within a specific area
and it was not permitted to be involved in any other commercial
business activity of whatsoever nature without ITEC’s consent.
3.
Tuscan could only conduct business in respect of those products that
were made available by ITEC, from time to time, for sale
to Tuscan.
In this regard, Tuscan was obliged to purchase ali equipment and
consumables from ITEC at an agreed price. Tuscan
was
however allowed to sell equipment (not ITEC products) acquired as a
trade-in (Tuscan was not allowed to service this equipment),
as well
as sell second-hand ITEC products acquired from customers, provided
that the annual turnover generated by trade-ins and
second-hand goods
did not exceed more than 10% of Tuscan’s annual turnover.
4.
Tuscan was obliged to store, via a centralised server and on the
software packages provided by ITEC, up to date, comprehensive
and
detailed records of all customers, all transactions involving ITEC
products, all prospective customers, all employees and all
records
relating to its carrying out of its obligations in terms of the
agreement. This included, inter alia, all the names, contact
numbers
and addresses of all customers, potential customers and employees of
Tuscan. Tuscan would pay ITEC the fees relating to
Tuscan’s use
of the software packages and/or the maintenance and/or other such
support provided by or on behalf of ITEC to
Tuscan in respect
thereof.
5.
ITEC would have full access to all information stored by Tuscan via
the centralised server and/or software packages.
6.
All service agreements entered into between Tuscan and its customers
had to contain provisions obliging customers to acquire
consumables,
paper and spare parts either from an authorised dealer, such as
Tuscan, or from ITEC directly.
7.
When supplying ITEC products to end-users thereof who intended to
acquire the right to use, and/or possession of, such products,
not by
means of purchasing, but by means of rental, lease, hire- purchase or
such like agreements to be concluded between such
end-users (on the
one hand) and banks and/or finance houses (on the other), Tuscan was
obliged to use, on the terms contained therein,
only Finance’s
agreements.
8.
Tuscan would desist from doing business in respect of any financed
ITEC product that was not financed through Finance, and where
the
product was so financed, Tuscan was not permitted to do business with
the end-user whilst the latter was in arrears with the
rental
payments.
9.
In order to protect the proprietary interests of ITEC, its product
and its network of dealers and resellers, Tuscan, inter alia,
undertook that it would for a period of 18 months from the date of
termination of the agreement, for whatsoever reason, not to
be
engaged, whether directly or indirectly, in any similar or related
business and that it would not, in competition with ITEC
or any of
its dealers or resellers, make any approaches to and/or have any
contact with any end-user of ITEC products and/or any
of its dealers
and/or resellers.
10.
Tuscan would ensure that the aggregate value of its current assets
would at all times exceed the aggregate of its current liability
as
determined in accordance with general accepted accounting practices
and general accepted auditing standards and that it would
trade in
circumstances where it would able to pay its debts when due.
11.
Tuscan would comply at ail times with company requirements and
principles pertaining to corporate governance, including (but
not
restricted to) all revenue, taxation, employment, company,
secretarial and accounting statutory and common law requirements.
Without derogating from the generality of the aforegoing, Tuscan
would timeously complete and lodge all financial statements and
financial and/or a tax returns with the relevant authorities and it
would complete the said documents in accordance with the statutory
requirements pertaining thereto, failing which ITEC would be entitled
to cancel the agreement without giving a remedial notice,
and in
which event Tuscan would be deemed two have granted to ITEC an option
to purchase Tuscan’s movable goods, debtors,
stock, service
base and
goodwill
in the manner and at the price as set out in the agreement.
[9]
As part of the dealership agreement, the parties also signed an
agreement of cession. This agreement was apparently concluded
on 25
January 2005. In terms of this agreement Tuscan ‘hereby cedes,
transfers, makes over, assigns and pledges to [ITEC]
all [Tuscan’s]
right, title and interest in and to all debts, claims and/or
reversionary rights . . . which are now owing,
or which may in the
future become owing to [Tuscan]’ as security for Tuscan’s
liability of its debts (present and future)
due to ITEC. Until such
time as Tuscan’s debtors would have been notified of the
cession, Tuscan would collect all sums of
money from the debtors and
received by Tuscan as agent for and on behalf of ITEC, which mandate
ITEC was entitled to terminate
by written notice.
[10]
Tuscan commenced doing business as envisaged in the dealership
agreement, which was extended from time to time. Consequent
upon the
conclusion of the agreement, Tuscan promoted the ITEC products,
sourced customers and serviced customers with the supply,
maintenance
and all ancillary aspects relating thereto of ITEC products into the
market. In order to achieve it, Tuscan incurred
great expense and
made great effort to establish the required infrastructure.
[11]
ITEC Holdings (Pty) Ltd (‘Holdings’) (the second
respondent) rendered the financial, management and other services
through the centralised server mentioned in the dealership agreement
on behalf of those entities that have dealership agreements
with
ITEC, including Tuscan while the dealership agreement was still
operative. Tuscan was obliged to pay Holdings for the services
it
offered and provided.
[12]
Although ITEC, Holdings and Finance have common interests and certain
common directors, each of them functions independently
and has a
separate business focus.
[13]
On 22 February 2007 a sale of shares agreement was entered into in
terms of which Holdings became the owner of 30% of the issued
share
capital in Tuscan.
[14]
Tuscan was at all relevant times in arrears with its statutory
obligations regarding timeous payments to SARS, which was a
breach of
the terms of the dealership agreement relating to corporate
governance.
[15]
Tuscan also failed to ensure that the aggregate value of its current
assets at ail times exceeded the aggregate of its current
liabilities
as envisaged in the agreement.
[16]
On 5 November 2012, ITEC sent a letter to Tuscan informing the latter
of its breach of the terms of the dealership agreement
relating to,
inter alia, corporate governance, ITEC’s cancellation of the
agreement as a result of Tuscan’s breach
and the exercise of
ITEC’s option to purchase Tuscan’s assets (to be
identified), including Tuscan service base comprising
of all extant
service agreements ('the agreement of sale’). Tuscan was also
requested to give ITEC access to the premises
for purposes of
identifying those assets that ITEC would be purchasing as well as
access to and possession of the service agreements
comprising the
service base as envisaged in the dealership agreement.
[17]
Tuscan did not construe or consider the letter of cancellation as a
valid cancellation and did not allow ITEC access to Tuscan’s
documentation or premises. Tuscan adopted the attitude that the deed
of cancellation amounted to a repudiation, which Tuscan accepted.
[18]
By the middle of December 2012 it was common cause that the
dealership agreement was no longer in esse.
[19]
Tuscan then prepared a letter during December 2012, which was sent to
ITEC, Finance and Holdings (‘the ITEC group’)
informing
them of Tuscan’s acceptance of ITEC’s repudiation and of
the invalidity of the agreement of sale. In this
letter the ITEC
group was also threatened with an urgent application to protect
Tuscan’s rights.
[20]
On 18 December 2013 Tuscan addressed a letter to all its customers
advising them that Tuscan had made the decision to change
is supplier
from ITEC to Konica Minolta with immediate effect. They were also
informed that Tuscan’s business would carry
on as usual and
that its contact numbers and banking details would remain unchanged.
[21]
On 23 January 2013, ITEC responded with a letter to Tuscan, taking
issue with the legal contentions advanced in Tuscan’s
letter
and threatening the latter with a winding-up application. In this
letter ITEC also claimed an amount of R455 134 and R633
730 in
respect of moneys due and payable to ITEC and Holdings respectively.
[22]
On 29 January 2013 a letter was sent by ITEC to ail the customers in
Tuscan's customers base. The following was stated in this
letter:
‘
This
is to confirm that the attached letter contains inaccuracies,
untruths and has been sent to you in an attempt to mislead you.’
and ‘Our attorneys have been instructed to take steps against
[Tuscan] including, if necessary, an application for the winding
up
of [Tuscan].’ and ‘As you are a valued client to us, we
will make arrangements with an alternative dealer to supply
you with
products, spares and consumables.’
[23]
A further letter was written by ITEC to all Tuscan’s customers
dated 4 February 2013. It reads as follows:
‘
This
letter serves to confirm that [Tuscan] no longer has any rights in
terms of any service agreement that you may have entered
with that
company. Once [ITEC] terminated its contract with [Tuscan], then
[Tuscan] lost all of its rights and interests to all
ITEC contracts
and service agreements’.
[24]
On 21 February 2013, an e-mail was sent from Finance to one of
Tuscan's customers informing the latter that Extra Dimensions
224 t/a
ITEC Pretoria East (‘Pretoria East’) (the fourth
respondent) would attend to his needs in respect of service
and
equipment. Attached to this e-mail was a letter by Finance to USN,
one of Tuscan’s customers, informing it that Tuscan
was no
longer an authorised ITEC dealer.
[25]
On 22 February 2013, Tuscan was informed by its single largest
client, ie Mailtronic, that it was cancelling the various service
and
maintenance agreements as they had decided to sign new agreements
with ITEC Connect (Pty) Ltd (‘Connect’) (the
fifth
respondent). This decision was taken by Mailtronic subsequent to it
being contacted by Connect.
[26]
On Friday 8 March 2013 one of Tuscan’s employees received a
telephone call from one of Connect’s employees who
informed him
that Connect was willing to offer him a job at a higher salary and
with a company vehicle as they were struggling
to service the
Mailtronic machines.
[27]
Since the beginning of the whole saga, Pretoria East approached
Tuscan’s employees. All of them resigned because they
had not
been payed their salary in certain months and it was clear to them
that Tuscan was in financial difficulty.
[28]
The employees were not persuaded to terminate their employment with
Tuscan.
[29]
On 1 March 2013 ITEC wrote a letter to one of its dealers, stating,
inter alia, the following:
‘
While
their [Tuscan’s customers] existing contract with [Tuscan] has
been ceded to us, it is better for them to re-sign a
new contract, on
the same terms, with us.’ and ‘Please let me know where
they are located and I will organise for an
authorised ITEC office to
contact them and to do the necessary paperwork.’
[30]
On 25 February 2013 the ITEC group also sent out a letter to all
Tuscan’s customers, stating, inter alia, the following:
‘
[Tuscan]
concluded a cession and pledge agreement with us on 25 January 2005
in terms of which, as security for its indebtedness
to us, [Tuscan]
transferred, assigned, made over and pledged inter alia its rights,
title and interest in and to any and all rental,
service, maintenance
and/or sale agreement entered into between [Tuscan] and you, the
customer.’ and 'In terms of clause13
... [of the cession
agreement], we were entitled at any time to give notice to you of
this cession and to advise you that all amounts
payable by you to
[Tuscan] are forthwith and immediately payable to us and that we
forthwith terminate [Tuscan's] mandate to collect
such amounts from
you.’ and ‘All rights existing under all agreements
concluded by you with [Tuscan] vest solely with
us and, as a
consequence, [Tuscan] has no right to enforce the rights and
obligations under any such agreement with you. This is
no doubt why
[Tuscan] has approached many of you in an attempt to conclude new
agreements in the name of a different entity.’
and ‘[Tuscan]
is indebted to us and we are taking steps to secure recovery of all
amounts due and owing by [Tuscan] to us.
You are hereby given notice
that all amounts payable by you to [Tuscan] are forthwith payable to
us.’
[31]
In its founding affidavit, Tuscan says the following regarding its
future business plans:
‘
The
fact that [Tuscan] will now be sourcing its requirements for purposes
of the maintenance agreement, such as parts and the like
directly
from Konica Minolta and no longer from the ITEC group of companies
does not mean that the service agreements have become
null and void
or have in any manner whatsoever been taken over by any of the
Respondents.’ and ‘It is for this very
reason that they
are constantly pushing and contacting [Tuscan's] clients in order to
force them into signing new service and maintenance
agreements in
respect of the continued maintenance of the machines.’
[32]
The applicant seeks a final interdict. It is trite law that in order
to succeed in obtaining a final interdict, an applicant
must
establish a clear right; an injury committed or reasonably
apprehended; and that there is no satisfactory alternative remedy.
(See Waste Products Utilisation (Pty) Ltd v Wilkes and another
2009
(2) SA 515
(SCA) at 286E).
TUSCAN’S
CLEAR RIGHT
[33]
In terms of the doctrine of subjective rights, which was accepted as
part of our law in Universiteit van Pretoria y Tommie
Meyer Films
(Edms) Bpk
1977 (4) SA 376
(T), Tuscan must establish that it has
legal interest worthy of protection in the goodwill of the business
it is presently conducting.
Before legal recognition will be accorded
to such an interest, it must comply with two requirements: firstly,
the interest must
be of value to the person concerned; and secondly,
it must have a measure of distinctness, definiteness and independence
that it
is possible to use it, enjoy it and dispose of it. (See Van
Heerden-Neethling Unlawful Competion 2 ed p 89 - 90 and the
authorities
therein cited).
[34]
The fact that goodwill can serve as the object of an immaterial
property right, has been accepted in South African law. (See
Van
Heerden- Neethling p105 - 107, Universiteit van Pretoria v Tommie
Meyer Films (Edms) Bpk at 386 and Atlas Organic Fertilisers
(Pty) Ltd
v Pikkewyn Gwano (Pty) Ltd
1981 (2) SA 173
(T) at 182D).
[35]
In The Commissioners of Inland Revenue v Muller & Co’s
Margarine Ltd
[1901] AC 217
at 223 - 224 the meaning of the term
‘goodwill’ is described as follows:
‘
What
is goodwill? It is a thing very easy to describe, very difficult to
define. It is the benefit and advantage of a good name,
reputation
and connection of a business. It is the attractive force, which
brings in custom. It is the one thing, which distinguishes
an old
established business from a new business at its first start. The
goodwill of a business must emanate from a particular centre
or
source. However widely extended or diffused its influence may be,
goodwill is worth nothing unless it has power of attraction
sufficient to bring customers home to the source from which it
emanates. Goodwill is composed of a variety of elements. It differs
in its composition in different trades and in different businesses in
the same trade. One element may be preponderate here and
another
element there. To analyse goodwill and split it up into its component
parts, to pair it down as the Commissioners desire
to do until
nothing is left but a dry residuum ingrained in the actual place
where the business is carried on while everything
else is in the air,
seems to me to be as useful for practical purposes as it would be to
resolve the human body into the various
substances of which it is
said to be composed. The goodwill of a business is one whole . . . ‘
(Own italics).
[36]
There can be no argument that the goodwill is of value to Tuscan and
that the latter can dispose of it. What has to be considered,
however, is the effect the cession and the agreement of sale has on
Tuscan’s real right in order to establish the ambit of
the
(clear) right that was exposed to infringement. This is obviously the
principal factor that requires consideration when the
issue of
wrongfulness is to be decided.
[37]
From the wording of the cession agreement (‘[Tuscan] hereby
cedes’) it is clear that Tuscan’s personal rights
were
indeed transferred to ITEC when the agreement of cession (the
obligatory agreement) was concluded. Further, the cession is
nothing
more than a cession of personal rights in securitatem debiti, the
consequence of which is that Tuscan has retained the
dominium of the
ceded rights in the form of a reversionary interest therein, whilst
ITEC has acquired restricted real rights in
the rights of action to
exercise such rights in the event of non-payment of the principal
debt. (See Incledon (Weikom) (Pty) Ltd
v Qwagwa Development
Corporation Ltd
[1990] ZASCA 85
;
1990 (4) SA 798
(A) at 804G-J and Land- en
Landboubank van Suid-Afrika v Die Meester en andere
1991 (2) SA 761
(A) at 771D-F).
[38]
The term ‘assign’ (the cession of rights and the
delegation of obligations) in the agreement of cession is a misnomer,
because it is clear from the terms of the agreement of cession that
the parties never intended to delegate Tuscan’s obligations.
In
any event, a contractual obligation cannot effectively be transferred
from the debtor to a third person by agreement unless
the creditor
consents thereto and agrees to accept the third person as the debtor
in substitution for the original debtor. (See
Van Achterberg v
Walters
1950 (3) SA 735
(T) at 745).
[39]
The end result of the cession is that Tuscan has only retained
obligations in respect of its contracts with its customers coupled
with the right to claim a re-cession of its personal rights upon
payment of all amounts due to ITEC.
[40]
The only significant right that Tuscan has in respect of the goodwill
of its business is the right, in terms of the agreement
of sale, to
claim payment of the purchase price in respect of the movable goods,
debtors, stock, service base and goodwill once
the contractual
process relating to the determination of the purchase has been
finalised. This right obviously has a corresponding
obligation and
that is to deliver the merx to ITEC, which includes the goodwill.
[41]
Furthermore, if regard is had to the agreement as a whole, it is
clear that the intention of the parties was that upon cancellation
of
the agreement Tuscan would cease ali business activities in order to
preserve the goodwill of the business with a view to placing
ITEC in
a position from where it could take an informed decision as to
whether it should exercise its option to purchase, without
the
goodwill being contaminated with any on-going activities.
[42]
Goodwill is, as stated in the The Commissioners of Inland Revenue -
case, one economic whole and it may continue to exist for
some time
notwithstanding the breaking up of the undertaking as an economic
unit.
[43]
Tuscan’s on-going activities with ITEC customers and its
activities relating to Konica Minolta customers in competition
with
ITEC, in spite of the fact that the movable goods, debtors, stock,
service base and goodwill have been sold to ITEC, is, in
my view,
rather an infringement of ITEC’s personal right to claim
transfer of an uncontaminated economic whole. This is so
because, if
a seller disposes of the goodwill of a business he is not allowed
thereafter to act contrary to the sale. The obligation
of the seller
not to solicit his former customers or to conduct his business in
such a manner as to deprive the buyer of the ‘goodwill’
that he paid for, stems from a naturale of an agreement of purchase
and sale. This is so, irrespective of whether there is a restraint
of
trade. It is even possible, depending on the terms of the agreement,
that the naturale might outlive the restraint. This was
decided in A
Becker and Co v Becker and others
1081 (3) SA 406
(A), in which case
Van Heerden Wn R at 419H said the following:
‘
Die
erkende naturalia van ‘n koopkontrak van liggaamlike goed kan
egter analogiese toepassing vind op die verkoping van ‘n
immateriele goed soos werfkrag. Die wat ten gunste van die koper
strek, is gerig op beskerming van sy genot en gebruik van die
menx.
Vandaar bv. die verkoper se verpligtinge rakende uitwinning en
verborge gebreke. Soos reeds aangedui, konstitueer ‘n
direkte
inwerking deur die verkoper ‘n nadelige aantasting van die
koper se genot en gebruik van die werfkrag. Daar is dus
alle rede om
sodanige inwerking in stryd te ag met ‘n naturalium (sic) van
die betrokke koopkontrak.’
[44]
The fact that Tuscan is obliged to render prestation in terms of its
agreements with its ITEC and Konica Minolta customers
and that a
cessation of all business activities might expose Tuscan to claims
for breach of contract, is, mindful of what was decided
in the Becker
case, no excuse to carry on with the business. In any event, Tuscan
could have safeguarded itself in this regard
by the insertion of an
appropriately worded clause in its standard customer agreements.
[45]
It follows that Tuscan’s (clear) right in respect of the
goodwill of the business is limited to his claim for payment
of the
purchase price in respect of the movable goods, debtors, stock,
service base and goodwill, and that it has no powers of
use and
enjoyment - only obligations.
[46]
This is basically the end of the applicant’s case. I shall
nonetheless deal with the alleged wrongful acts of the respondents
on
the assumption that Tuscan lawfully cancelled the dealership
agreement by its acceptance of ITEC’s alleged repudiation.
WRONGFULNESS
[47]
In South African law the general normal or basic criterion to be
employed in determining delictual wrongfulness is the legal
convictions of the community: the boni mores. The boni mores test is
an objective test based on the criterion of reasonableness.
The basic
question is whether, according to the legal convictions of the
community and in the light of all the circumstances of
the case, the
defendant infringed the interests of the plaintiff in a reasonable or
unreasonable manner. The application of the
boni mores criterion
essentially entails the balancing or weighing up of, on the one hand,
the interests which the defendant actually
promoted with his act,
and, on the other, those which he actually infringed. The court must
weigh the conflicting interests of
the plaintiff and the defendant in
the light of all the relevant circumstances and in view of all
pertinent factors - also the
public interest - in order to decide
whether the infringement of the plaintiff’s interest was
reasonable or unreasonable.
(See Van Heerden-Neethling 123-124 and
the authorities therein cited).
[48]
Of course, the courts do not actually test what the legal convictions
of the community are when they exercise their discretion
to decide
whether a particular instance of harm-causing is to be branded as
wrongful. The reference to legal convictions of the
community is
better understood as an acknowledgement of the fact that the court,
in exercising its judicial discretion to decide
the wrongfulness
issue, must be sensitive to the boni mores, or rather to the
appropriate norms of the objective value system embodied
in the
Constitution. (See the discussion in Wille’s Principles of
South African Law, 9 ed, 1096 - 1102 and the authorities
cited
therein. See also Phumela Gaming & Leisure Ltd v Grundling &
others
(2006) JOL 17421
(CC) at p 15-18).
INTERFERENCE
WITH TUSCAN’S CONTRACTUAL RELATIONSHIPS
[49]
Under this heading I shall deal with the alleged interference with
all Tuscan’s contractual relationships, in other words,
its
contractual relationships with its customers and employees.
[50]
In Atlas Organic Fertilisers (Pty) Ltd v Pikkewyn Gwano (Pty) Ltd at
202 it was decided that the actio legis Aquiliae is available
to a
party to a contract who complains that a third party has
intentionally and without lawful justification induced another party
to the contract to commit a breach thereof.
[51]
It should, however, be kept in mind that in Atlas Organic Fertilisers
(Pty) Ltd v Pikkewyn Gwano (Pty) Ltd the court was dealing
with a
trial action for an interdict and damages and not with an application
for an interdict. The actio legis aquiliae is one
of two bases for
protection against unlawful competition. In terms of this action a
competitor may claim damages for the wrongful
and culpable causing of
patrimonial damage. The other basis is an interdict, which is
tailored to prevent a (threatening) wrongful
competitive act.
[52]
Since an interdict is directed at the prevention of a wrongful act
and not at retribution for wrongfulness already committed,
there is
no reason why fault on the part of the wrongdoer should be a
requirement for the granting of an interdict. Neither culpa
nor dolus
need to be proved where the interdict sought has a preventative
function. What the applicant has to show is an act that
has commenced
or merely be threatening and the wrongfulness of the act, which means
that there must be a threat to or an infringement
of a recognised
subjective right. In the case of unlawful competition, wrongfulness
lies in the (threatened) infringement of a
competitor’s right
to the goodwill of the business. (See HR South Africa BV v Hall (aka
Baghas)
2004 (4) SA 174
(WLD) at 180 and Van Heerden- Neethling p 84
-87).
[53]
One of the circumstances, I think, that has to be taken into
consideration in deciding wrongfulness, is the restraint of trade
contained in the dealership agreement. A party wishing to be absolved
from such a term must allege that the enforcement of the
restrictive
conditions would be contrary to public policy and he must set out the
factual basis for this allegation. (See Magna
Alloys & Research
(SA) (Pty) Ltd v Ellis
[1984] ZASCA 116
;
1984 (4) SA 874
(A) at 893).
[54]
Tuscan did not attack the validity of the restraint of trade in its
founding affidavit in view of which I must accept, for purposes
of
this application, that the restraint is valid and enforceable.
[55]
Furthermore, it is clear that the actions of the ITEC group in
respect of Tuscan’s customers, were primarily aimed at
the
protection of what they perceived their rights were in terms the
dealership agreement and the sales agreement. There is, however,
no
indication to be found in the common cause facts that the customers
breached or threatened to breach their agreements with Tuscan
as a
result of ITEC’s interference. This does not mean that should a
firm systematically induce his competitor's customers
to leave, his
conduct would necessarily be lawful. Public policy dictates that,
where the aim in inducing a competitor's customers
to terminate their
agreements lawfully is not to obtain their business, but cripple or
eliminate the business competitor, this
action be branded as unlawful
competition. The common cause facts do not justify such an inference.
[56]
Regarding the alleged interference with Tuscan’s employees, I
cannot find fault with any of the respondent's actions
in this
regard. Their principal aim was to benefit themselves, which is not
an illegitimate aim and thus not wrongful. (See Vital
Administration
CC v Irenco (Pty) Ltd and others
(2004) 4 ALL SA 354
(T) at 364). In
any event, the employees decided to terminate their employment with
Tuscan for financial reasons.
[57]
In the light hereof, I cannot find that the respondent's interference
with Tuscan's customers or employees was unreasonable
and thus
wrongful.
THE
CONFIDENTIAL INFORMATION
[58]
Before information can qualify as confidential it must, first of all,
be capable of application in the trade or industry. Secondly,
it must
only be known to a closed circle, or, to put it differently, it must
be something that is not public property or public
knowledge.
Thirdly, the information must be of economic value to the plaintiff.
(See Van Heerden-Neethling 215 - 216 and the authorities
therein
cited).
[59]
I agree with the submission made by Mr Rip SC that the information is
confidential because it is capable of application in
the trade, it is
only known to the ITEC group, which is a closed circle, and it has an
economic value to Tuscan.
[60]
The fact that the information is confidential does not assist Tuscan,
because of the restrictive conditions contained in the
restraint of
trade: Tuscan has undertaken that it would for a period of 18 months
from the date of termination of the agreement,
for whatsoever reason,
not to be engaged, whether directly or indirectly, in any similar or
related business and that it would
not, in competition with ITEC or
any of its dealers or resellers, make any approaches to and/or have
any contact with any end-
user of ITEC products and/or any of its
dealers and/or resellers.
[61]
The only damage that Tuscan can suffer because of the unauthorised
use of its confidential information is the loss of customers
or
potential customers and that is exactly what it has agreed to.
[62]
Thus, I find that the infringement of Tuscan's right to its
confidential information was under the circumstances not wrongful.
CONCLUSION
[63]
In the premises, I am not persuaded that those facts averred in the
applicant’s affidavits, which have been admitted
by the
respondent, together with the facts alleged by the respondent justify
the order sought.
[64]
In the result, I make the following order: The application is
dismissed with costs.
A
B ROSSOUW A J
DATE:
02/04/2013