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[2012] ZAGPPHC 335
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Reunert Ltd v Holdsworth and Another (17335/2012) [2012] ZAGPPHC 335 (10 December 2012)
REPORTABLE
IN
THE HIGH COURT OF SOUTH AFRICA
(NORTH
GAUTENG, PRETORIA)
Case
no:17335/2012
DATE:10/12/2012
In
the matter between:
REUNERT
LIMITED
…...............................................................................
APPLICANT
And
HOLDSWORTH
JOHN
CHARLES
...........................................................
FIRST
RESPONDENT
ALTIVEX
295 (PTY)
LTD
............................................................................
SECONDRESPONDENT
JUDGMENT
(Rule 49(11) Application)
BAQWA
J,
Introduction
[1]
In this application applicant seeks an order directing that pending
the determination of the petition to the Supreme Court of
Appeal and
the final determination of any appeal pursuant thereto against an
order by this court granted on 24 August 2012, the
operation and
execution thereof not be suspended.
[2]
The respondents filed an application for leave to appeal against the
said order which was heard on 22 October 2012. The application
was
dismissed with costs having been opposed by both the first and second
respondents.
[3]
At the time of the hearing of the application, the applicants in the
present matter had already filed papers in terms of Rule
49(11). The
application could however not be heard absent a petition for leave to
appeal to the Supreme Court of Appeal (SCA).
[4]
The respondents filed the petition on 16 November 2012 and the
applicant enrolled this matter for hearing.
[5]
Prior to bringing this application, the applicant had sought an
undertaking from the respondents to abide by the decision of
this
court pending their petition for leave to appeal and any subsequent
appeal thereafter. The respondents were unwilling to give
such an
undertaking.
[6]
Further, the applicant has made a tender to the respondents to the
effect that should this application be granted and in the
event that
the respondents are successful on appeal, the applicant will
indemnify them for any proven damages suffered as a result
of their
having to cease business from date of written acceptance of the
tender prior to the hearing of this matter to the date
of a
successful appeal. The respondents have declined the tender.
[7]
On the other hand the first and second respondents have tendered to
the applicant that from the date of acceptance of their
tender to the
date of finalisation of the appeal they:
7.1.
Will not launch a Mobile VoIP application;
7.2.
Will not approach any of Nashua ECN’s employees nor make any of
them any employment offers and if the employees approach
them, they
will not make them any offers of employment nor employ them;
7.3.
Will not approach the customers of Nashua ECN, but if any of the
customers of Nashua ECN approaches them for any other service
than
mobile VoIP they will be entitled to accept the business;
7.4.
The applicant has not accepted this tender.
[8]
It is upon failure to produce a positive outcome by way of settlement
between the parties that this matter comes before me.
The
law
[9]
When an appeal has been noted or an application for leave to appeal
against or to rescind, correct, review or vary an order
of a court
has been made, an application can be lodged for the suspension of the
operation and execution of the order in question
pending the decision
of such appeal or application. The provisions of Rule 49(11) are
applicable in such cases.
[10]
As Williamson J stated:
..
the general effect of the noting of an appeal is that thereafter no
results can flow from the judgment which would place the
parties in a
position different from that which they enjoyed immediately before
judgment was given. ”
See Alexander v Joki 1948(3) SA 269(W)
at 278
[11]
The test to be applied in a Rule 49(11) application was succinctly
stated by his lordship Corbett JA in the case of:
South Cape Corp(Pty) Ltd v Engineering
Management Services (Pty) Ltd 1977(3) SA 534(A) at 545 D-F when he
said:
‘
'In
exercising this discretion the court should, in my view, determine
what is just and equitable in all circumstances, and, in
doing so,
wouid normally have regard, inter alia to the following factors:
(1)
The potentiality of irreparable harm or prejudice being sustained by
the appellant on appeal (respondent in the application)
if leave to
execute were to be granted;
(2)
The potentiality of irreparable harm or prejudice being sustained by
the respondent on appeal (applicant in the application)
if leave to
execute were to be refused;
(3)
The prospects of success on appeal, including more particularly the
question as to whether the appeal is frivolous or vexatious
or has
been noted not with the bona fide intention of seeking to reverse the
judgment but for some indirect purpose, e.g to gain
time or harass
the other party; and
(4)
Where there is the potentiality of irreparable harm or prejudice to
both appellant and respondent, the balance of hardship or
convenience, as the case may be. ”
See also Erasmus: Superior Court
Practice at page B1-370A
[12]
The common law rule suspending a judgment upon the noting of an
appeal is founded on the avoidance of irreparable harm to the
intending appellant.
De
Villiers JA explains it as follows:
‘
The
foundation of the common law rule as to the suspension of a judgment
on the noting of an appeal, is to prevent irreparable damage
from
being done to the intending appellant, whether such damage be done by
a levy under a writ, or by the execution of the judgment
in any other
manner appropriate to the nature of the judgment appealed from. ”
Reid v Godart
1938 AD 511
at 513
[13]
Before deciding the main issue, namely, whether or not to suspend the
judgment, I need to pronounce on three preliminary issues,
that is,
the issue of urgency, affidavits that have been filed out of time and
an application to strike out what respondents submit
is offensive
matter in the replying affidavit.
[14]
The applicant submits that should the respondents be permitted to
impede their progress in the development of a new product,
the
applicant suffers prejudice. Applicant submits that for everyday that
the respondents are able to target and solicit the customers
of the
applicant and solicit and make use of the applicant’s
ex-employees the applicant suffers prejudice. This submission
is made
on the basis of first respondent’s stated intention to continue
with the business of second respondent notwithstanding
the terms of
the order granted by this court on 24 August 2012.
[15]
Respondents deny that this application is urgent and point out that
the applicant cannot point to any instance where the said
order has
been breached. In the papers before me the respondents have stated
that they have no intention of breaching the order.
[16]
What has to be borne in mind however is the manner in which a breach
of a court order is dealt with as against the nature of
Rule 49(11)
proceedings. A breach would in all probability result in a contempt
of court application which is retrospective or
backward looking in
nature as against a Rule 49(11) application which is prospective or
forward looking. This means that in such
an application the court
looks at the probability of a breach occurring and after weighing all
the circumstances, decides what
is just and equitable.
[17]
I have considered the circumstances of this matter and come to the
conclusion there is urgency. The urgency stems from the
need for
protection which led to the granting of an interdict in the main
application. Circumstances between parties presently
are not
significantly different than they were as at 24 August 2012. I have
accordingly allowed the matter to go forward on the
basis that it is
urgent.
This
determination also leads me to deciding the second issue regarding
the propriety of the filing of the fourth and fifth affidavits
by the
respondents and the applicant respectively. The filing of those
affidavits is allowed in terms of Rule 6(12)(a) of the rules
of this
court.
[18]
Regarding the application to strike out certain portions of the
applicant’s replying affidavit the material presented
in the
offending paragraphs (as per respondents5 application to strike out)
is in my view not new material but an elaboration on
an earlier
contention by the applicant regarding new products. Whilst matters
relating to spending by applicant in the main application
for an
interdict were raised between the parties, they were dealt with by
applicant by reference to documentation such as invoices.
There was
no ‘budget’ document annexed to applicant’s papers
in this regard. When evidence in a ‘budget’
format is now
presented it should not be considered as new evidence. Further, these
portions relate to the information which applicant
sought to make
available to the respondents on condition that the respondents made a
confidentiality agreement before receiving
same. This request was
made due to the commercially sensitive nature of the information. The
undertaking was not made and the respondents
now seek to bar that
information from coming before this court by means of an application
to strike out. Since the respondents
had an opportunity to consider
the issue before the matter came to court, and because the matter was
dealt with in the main application
I do not consider it appropriate
to strike out the matter as requested and that application is
refused.
The
facts
[19]
This application is made pursuant to an order of this court granted
on 24 August 2012. In summary, the order:
19.1.
Interdicts and restrains the first respondent until 30 August 2012
and in the Republic of South Africa from
19.1.1.
Being engaged with the second respondent; and/or
18.1.2.
An entity which competes with the applicants’ ECN division;
and/or
19.1.3.
any entity engaged in the development of Voice Over the Internet
Protocol;
19.1.4.
canvassing the customers of the applicant’s Nashua ECN
division;
19.1.5.
causing prejudice to the applicant’s ECN division in the
Republic of South Africa by any lawful competition;
19.2.
Interdicts and restrains the first respondent from soliciting the
employees of the applicant;
19.3.
Interdicts and restrains the first respondent from divulging the
applicant’s confidential information.
19.4.
Interdicts and restrains the first respondent from diverting or
usurping for himself or any other entity in which he is involved,
including the second respondent, the maturing corporate opportunities
of the applicant;
19.5.
Interdicts and restrains the first and second respondents from
competing unlawfully with the applicant’s Nashua ECN
division
and/or engaging in any form of corporate sabotage against the
applicant’s Nashua ECN division including the unlawful
use of
the applicant’s confidential information, the soliciting of
employees and/or its customers;
19.6.
Ordering the first and second respondents to pay the costs of the
application (including the costs associated with the hearing
on 17
Aril 2012) jointly and severally the one paying, the other being
absolved.
[20]
The respondents lodged an application for leave to appeal to the Full
Bench of the North Gauteng High Court alternatively to
the SCA
against whole judgment and order granted.
[21]
The applicant sought undertakings from the respondents that they
would abide by the terms of the order pending the finalisation
of the
application for leave to appeal but these were not given, hence this
application in terms of Rule 49(11).
[22]
The petition was lodged with the SCA on 20 November 2012. Applicant
has indicated its intention to oppose the respondent’s
petition. Barring any unforeseen event, a decision to grant or refuse
the respondent’s leave to appeal to the SCA will in
all
probability be taken during March 2013. Should leave be granted, the
appeal would probably be heard in the last term of 2013
or in the
first term of 2014 and in the latter instance judgment would be given
at the end of March 2014.
[23]
The attitude of the respondents to the judgment against which leave
is sought is summarised in the report published in a report
on 5
September 2012 on the website www.itweb.co.za where the first
respondent indicates that despite that judgment he "is
still
allowed to compete, as long as he does not do so in an
anti-competitive manner by soliciting customers, which he has no
intention of doing.”
[24]
In my judgment of 24 August 2012 I deal with the contractual
undertakings which were given by the first respondent which were
not
adhered to and I do not wish to reiterate them but merely make
reference thereto. Further, whilst it is true that part of that
order
(relating to prayer 1 of part B of the Notice of Motion) has expired
as it was only effective until 30 August 2012, the rest
of the order
was not
time
bound. The order that would still be effective would be that relating
for example, to applicant’s confidential information,
maturing
business opportunities and soliciting of customers of the applicant.
[25]
Absent any protection in the form of execution of the order, the
respondent would be at liberty to approach the customers of
the
applicant and utilise confidential information of applicant. They
would be able to do so precisely because there would be nothing
to
restrain them from taking that line of action.
In
my ex tempore judgment dismissing the application for leave I
expressed the view that it is unlikely that another reasonable
court
would reach a different conclusion to the one 1 came to.
[26]
Given the time it would take to finalise the petition for leave to
appeal and the appeal if leave is granted, I am of the view
that this
would result in immense hardship to the applicant. Put it in another
way, the balance of convenience favours the applicant
[27]
Applicant indicates that it has signed a pilot project with a large
logistics company with regard to the mobile VoIP application.
The
pilot project is to commence in January 2013 with a view to a full
commercial launch of its mobile application in March of
2013.
[28]
The hardship which the respondents indicate they will suffer is a
consequence of the judgment and order of 24 August 2012.
That is what
the petition to the SCA is about and that matter would be dealt with
by that court.
[29]
In the result, having read the documents filed, having listened to
Counsel and having considered the matter, I make the following
order:
29.1.
The application in terms of Rule 49(11) is granted with costs which
will include the cost of two counsel.
29.2.
The draft order handed into court is marked ‘’X”
and made an order of court.
(JUDGE OF THE HIGH COURT)
Applicant’s
attorneys: Norton Rose South Africa
Applicant’s
counsel: Adv A.R Bhana S.C
Adv
P Bosman
Respondents’
attorneys: Knowles Hussain Lindsay Inc
Respondents’
counsel: Adv E.L Theron
Adv
S.C Vivian
IN
THE NORTH GAUTENG HIGH COURT,
PRETORIA
(REPUBLIC OF SOUTH AFRICA)
CASE
NO: 17335/12
Order
of Baqwa, J granted on 4 December 2012
In
the matter between:
REUNERT
LIMITED
...................................................................................
Applicant
and
HOLDSWORTH
.
JOHN
CHARLES
.........................................................
First
Respondent
ALTIVEX
295 (PTY)
LIMITED
...................................................................
Second
Respondent
DRAFT
ORDER
Having
heard Counsel for the parties and having read the papers filed of
record and
having
considered the matter, an order in the following terms -
1.
pending the determination of the respondents’ application to
the Supreme Court of Appeal delivered on 16 November 2012
for leave
to appeal against the judgment of Baqwa, J dated 24 August 2012
(“the Judgment”) and the finalisation of
any subsequent
appeal by the respondents which may follow from the granting of the
application, the operation and execution of
the terms of the order
set out in paragraph 26 of the Judgment are not suspended;
2.
the Tender made by the applicant at paragraph 92 of 113 founding of
affidavit (page 40 of the papers) is made a condition of
this order.
3.
the respondents are ordered to pay the costs of this application,
jointly and severally, the one paying the others to be absolved,
which costs are to include the costs occasioned by the employment of
two counsel.
REGISTRAR BY ORDER OF COURT