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[2013] ZAKZDHC 58
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CIM Chemicals (Pty) Ltd v Roodt and Another (14162/2011) [2013] ZAKZDHC 58 (24 October 2013)
IN
THE KWAZULU-NATAL HIGH COURT, DURBAN
REPUBLIC
OF SOUTH AFRICA
CASE
NO.: 14162/2011
In
the matter between
CIM
CHEMICALS (PTY) LTD
................................................................................
APPLICANT
And
MIKE
ROODT
.........................................................................................
FIRST
RESPONDENT
BRAGAN
CHEMICALS (PTY) LTD
..................................................
SECOND
RESPONDENT
JUDGMENT
MOKGOHLOA
J
[1]
The first respondent was employed by the applicant since 2005. During
May 2009 a formal contract of employment was concluded
between the
applicant and the first respondent. The relevant clause in this
application is clause 23 which reads:
“
23
RESTRAINT
OF TRADE
23.1.
The employee undertakes not to be engaged in the establishing of a
new business be it direct or indirect or as a shareholder,
partner,
member of a close cooperation, director of a company or in any other
capacity within one year after termination of this
agreement in the
area known as KwaZulu-Natal.
23.2.
The employee acknowledges and agrees that the aforesaid restraint is
fair, reasonable and necessary for the protection of
his employer,
his employer’s trade name and the goodwill attached thereto.”
[2]
On 30 November 2011 the first respondent resigned from his employment
with the applicant. The applicant brought an urgent application
seeking to enforce the restraint of trade. The first respondent
opposed the enforcement of the restraint of trade clause on the
basis
that the applicant’s representative, a Mr Glenn Pierre Mulder
(Mulder) waived compliance with the restraint clause.
The first
respondent alleged that during October 2011 he was approached by the
second respondent with regard to an employment opportunity.
He
discussed this matter with Mulder, a director of the applicant.
Mulder informed him “in no uncertain terms that the restraint
of trade provisions would be held against me.” Based on this
undertaking by Mulder, he proceeded in good faith to have discussions
with the second respondent. However, during November 2011, Mulder
informed him that the applicant would enforce the restraint clause.
[3]
The applicant disputed the first respondent’s version.
According to Mulder, he advised the first respondent of the restraint
clause. Thereafter he informed his co-director, a Mr John Edwin
Thompson (Thompson), of the first respondent’s intentions
to
resign from the company. Thompson advised Mulder to immediately
inform the first respondent that the restraint would be enforced.
[4]
The applicant further disputed the first respondent’s version
and relied on the provisions of Clause 2.3 of the employment
contract
which precludes the first respondent from relying upon the alleged
waiver by Mulder.
[5]
The matter came before
Kruger J
who
referred the matter for oral evidence in respect of the alleged
representation by Mulder to the first respondent.
[6]
The first respondent adduced evidence first followed by Mr Harry
Fuller (Fuller) on behalf of the first respondent, and thereafter
Mulder followed. The first respondent stated that he was employed by
the applicant as a sales representative or account manager.
During
2011 he received a telephone call from the second respondent offering
him employment. The offer was more than what he was
receiving with
the applicant. The first respondent approached Mulder and informed
him of the offer made by the second respondent.
Mulder’s
response was that the offer represented a good opportunity to the
first respondent and further that they (the applicant)
will not hold
anything against him. The respondent stated that he knew that Mulder
was referring to the restraint of trade.
[7]
Based on Mulder’s response, the first respondent proceeded and
discussed the offer with the second respondent. He waited
until
November 2011 (to receive his annual profit) before he could inform
Mulder that he had accepted the second respondent’s
offer. He
only informed Mulder that he was going to accept the offer. Mulder
called him that same day and advised him that he had
discussed it
with Thompson and that the applicant intends to enforce the restraint
provision. The first respondent stated that
had Mulder stated earlier
that the applicant would enforce the restraint provision, he would
not have negotiated the offer with
the second respondent.
[8]
Harry Fuller, (Fuller) a customer and friend of the first respondent
confirmed that the first respondent informed him of an
offer from the
second respondent. Mulder also informed him of this offer and stated
that he will not stand in the first respondent’s
way. Fuller
stated that the word ‘restraint’ was never mentioned to
him. In fact, he did not know that there was a
restraint clause in
the agreement between the applicant and the first respondent.
[9]
Mulder on the other hand confirmed what is stated in the founding
affidavit of Thompson on behalf of the applicant. He continued
and
stated that initially, when the first respondent informed him of the
offer, he expressed the view that the first respondent
would be
making a mistake if he accepted the offer due to the past history
between the first respondent and second respondent.
Later during
November 2011, the first respondent came to his office and informed
him that he had considered the offer and will
resign at the end of
the month. Mulder advised the first respondent that he (Mulder) did
not think that it was wise for the first
respondent to take the offer
but he will not stand on his way.
[10]
Mulder proceeded to Thompson and informed him of the first
respondent’s intention to resign month end. Thompson advised
him to remind the first respondent of the restraint provision which
Mulder did. The second respondent’s response was that
his
attorney advised him that no one will restrain him.
[11]
It is necessary to refer to the basis of the first respondent’s
challenge to the enforcement of the restraint clause
which is that
Mulder waived compliance with the restraint clause. He alleged that
Mulder informed him that
in no
uncertain terms, that the restraint provision would be used against
him.’
(My emphasis)
Kruger
J
considered the provisions of
Clause 2.3 of the non-variation clause and stated the following in
[12], [13] and [14] of his judgment:
“
[12]
In disputing the First Respondent’s version, the Applicant has
also relied upon the provisions of Clause 2.3 of the employment
contract which precludes the First Respondent from relying upon the
alleged waiver by Mulder.
[13]
In considering a clause of a similar nature, Schock J, in
Minnitt
v Stewart Wrightson (Pty) Ltd and Another
1979 (4) SA 151
(CPD),
held
that the clause is:
“
Irrelevant
to an averment that there has been an express consent inducing
Appellant to act to his prejudice” (at154 e-F)
[14]
I hold a similar view
in casu.
There is clearly a dispute which can only
be
determined by the hearing of oral evidence from the parties.”
[12]
The evidence of the first respondent and Fuller do not refer to the
express waiver. In fact his evidence was that Mulder told
him that
‘we won’t stand in your way’ The first respondent
stated that the word ‘restraint’ was never
used but that
he and Mulder understood what was meant by ‘we won’t
stand in your way’. This is in direct contradiction
to what is
contained in his affidavit which led
Kruger
J
to refer the matter for the
hearing of oral evidence.
[13]
I agree with Mr Boulle for the applicant, that the first respondent’s
evidence is one of tacit waiver as opposed to express
waiver. The
respondent stated that Mulder said he would not stand in his way.
Mulder admitted that he said that he would not stand
in the first
respondent’s way. However, Mulder stated that when the first
respondent told him that he has considered the
second respondent’s
offer and will be resigning end of month, Mulder told him it was not
wise for him to do so, because of
the past history between the first
and second respondent but, he would not stand in his way.
[14]
It should be noted that the first respondent’s contract of
employment contained a non-variation and non-waiver clause.
This is
clause 2.3 and reads:
“
2.3
No indulgence or condonation by the employer of any breach of any
term of this contract by the employee shall constitute a waiver
of
any of the employer’s rights in terms of this agreement. No
amendment of this contract shall be valid unless reduced to
writing
and signed by both parties.”
[15]
Mr Rorick, on behalf of the respondents argued that although the
first respondent conceded that the word ‘restraint’
was
never uttered when he informed Mulder of the employment prospects
with the second respondent, both he and Mulder knew what
they were
talking about.
[16]
In
Minnitt’s
case above,
Schock J
referring
to the non-variation clause contained in clause 15 of the agreement
stated:
“
In
my view clause 15 (i) goes no further than ensuring that conduct
which might otherwise be construed as a waiver of respondents’
rights shall not be so construed. ” (at 154E)
[17]
Centlivres JA in
Collen
v Rietfontein Engineering Works
1948
(1)
SA
413
(A)
referred to what was stated by Innes
CJ in
Laws v
Rutherford
1924 AD 261
at p263 and stated at 436:“[T]he onus of proving
waiver is strictly on the party alleging it and he must show that the
other
party with full knowledge of his right decided to abandon it,
whether expressly or by conduct plainly inconsistent with an
intention
to enforce it.”
[17]
The Appellate Division continued in
Hepner
v Roodepoort - Maraisburg Town Council
1962 (4) SA 772
(A),
and
held that “in the case of a waiver by conduct, the conduct must
leave no reasonable doubt as to the intention of surrendering
the
right in issue.”
[18]
In
casu
,
the first respondent’s evidence is that Mulder stated to him
that he would not stand in his way. Mulder on the other hand,
admitted having stated that to the first respondent but gave an
explanation that he referred to the past history that existed between
the first and second respondent. This was never disputed by the first
respondent. I find Mulder’s explanation reasonable
and further
that creates doubt as to the intention of Mulder to surrender the
restraint clause.
[20]
Having stated the above, I am of the view that the first respondent
failed to establish that the applicant had in fact waived
its right
to rely on the restraint clause.
Order
1.
The rule is confirmed with costs.
2.
Such costs to include all costs previously reserved.
MOKGOHLOA
J
COUNSEL
Counsel
for the Plaintiff: Adv AJ Boulle
Instructing
Attorneys: Morris Fuller Walden Williams Inc
1
Knightsbridge
18
Westville Road
Westville
Ref:
Mr G Brimelow/ap/C252
Counsel
for the Defendant: Adv DS Rorick
Instructing
Attorneys: Brett Purdon Attorneys
72
Bulwer Road
Glenwood,
Durban
Ref:
BAP/cs:R055/001
Date
of hearing
Date
of Judgment