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[2013] ZAGPPHC 521
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Tuscan Mood 179 (Pty) Ltd v ITEC Distribution (Pty) Ltd and Others (15767/13) [2013] ZAGPPHC 521 (2 April 2013)
IN
THE NORTH GAUTENG HIGH COURT, PRETORIA
(REPUBLIC
OF SOUTH AFRICA)
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 t/ a
ITEC
PRETORIA
EAST
.....................................................................................................
Fourth
Respondent
ITEC
CONNECT (PTY)
LTD
................................................................................................
Fifth
Respondent
JUDGMENT
AB ROSSOUWAJ
[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
thatthe
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 applicants relationship
with its
employees. The final relief that is sought is set out in paragraph 2
of the applicants 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 all 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 all 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
all 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 protectTuscan’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 all 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 thatTuscan
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 clause 13 ... [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 v 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
inciedon
(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 all 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
naturaie
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
naturaie
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
l
n
koopkontrak van liggaamlike goed kan egter analogiese toepassing vind
op die verkoping van
l
n
immateriele goed soos werfkrag. Die wat ten gunste van die koper
strek, is gerig op beskerming van sy genot en gebruik van die
merx.
Vandaar
bv. die verkoper se verpligtinge rakende uitwinning en verborge
gebreke. Soos reeds aangedui, konstitueer
l
n
direkte inwerking deur die verkoper
l
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
l
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 applicants 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
iegis 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 BVv 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
Vita!
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