Workforce Group (Pty) Ltd and Others v Bezuidenhout and Others (351/08) [2008] ZAFSHC 8 (19 February 2008)

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[2008] ZAFSHC 8
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Workforce Group (Pty) Ltd and Others v Bezuidenhout and Others (351/08) [2008] ZAFSHC 8 (19 February 2008)

IN THE HIGH COURT
OF SOUTH AFRICA
(ORANGE
FREE STATE PROVINCIAL DIVISION)
Case No. : 351/08
In the
matter between:-
THE
WORKFORCE GROUP (PTY) LTD
First
Applicant
FADS
(PTY) LTD
Second
Applicant
FEMPOWER
PERSONNEL (PTY) LTD
Third
Applicant
PHA
PHAMA AFRICA STAFF
Fourth
Applicant
SERVICES
(PTY) LTD
TOPLEVEL
PERSONNEL (PTY) LTD
Fifth
Applicant
WORKFORCE
HEALTHCARE (PTY) LTD
Sixth
Applicant
WORKFORCE
INFOTECH (PTY) LTD
Seventh
Applicant
FORCE
HOLDINGS (PTY) LTD
Eighth
Applicant
TRAINING
FORCE (PTY) LTD
Ninth
Applicant
and
BEZUIDENHOUT,
HENDRINA MAGDALENA
First
Respondent
HALL,
DESIRE
Second
Respondent
HARTSLIEF,
ALBERTUS STEPHANUS
Third
Respondent
MBA
PROJECT LABOUR
Fourth
Respondent
MANAGEMENT (PTY)
LTD
_____________________________________________________
HEARD
ON:
19
FEBRUARY 2008
_____________________________________________________
JUDGMENT
BY:
VAN
DER MERWE, J
_____________________________________________________
DELIVERED
ON:
26
FEBRUARY 2008
_____________________________________________________
[1] This
is an application, brought on urgent basis, for interdictory relief
based on contractual provisions and/or common law principles
in
respect of unlawful competition.
[2] The application was
preceded by an application for an order authorising the search of the
premises and motor vehicles of the first
to third respondents and the
seizure of any documentation belonging to the applicants in order to
preserve evidence for purposes
of the institution of the present
application. Such order was granted in this Court on 14 December
2007 in application no. 6762/2007.
This order was executed on 18
December 2007. As a result, numerous documents were seized by the
sheriff and are presently held
by the sheriff in terms of the order.
[3] In my view, the
application is sufficiently urgent to justify the departure from the
normal rules of court that did take place.
The infringement of
rights alluded to by the applicants and the resultant alleged
prejudice are such as to justify an order in terms
of Rule 6(12). In
the particular circumstances of this case the applicants proceeded
with due expedition in launching this application.
All the parties
have since filed comprehensive papers on the merits of the
application, totalling some 1000 pages. In these circumstances
counsel for the respondents, rightly in my view, did not press the
argument that I should refuse to hear the application due to lack
of
urgency.
[4] The applicants are a
group of closely interrelated and interdependent companies. They
share a common database as well as methods
of conducting business.
This application focuses on the part of the applicants’ business
that is commonly referred to as labour
broking. In essence labour
broking entails the following: The applicants provide its business
customers (“customers”) with
labour in accordance with the
specific needs of the customer. In the process contracts are entered
into between the applicants and
the customers and relationships are
built up in this regard. In the case of the applicants’
Bloemfontein branch mostly unskilled
and semi-skilled labour are
provided for whatever period needed by the customer. The labour is
provided by the applicants from a
labour pool of employees
(“employees”) and placed by the applicants with the customers.
The applicants then charge the customer
an appropriate rate for the
period that the employees are so placed. The employees are therefore
not employed or paid by the customers
but by the applicants. It is
clear therefore that the secret to success in labour broking is to be
able to meet the specific requirements
of the customers with
appropriate employees from the labour pool.
[5] The
first respondent entered into a written employment agreement with the
applicants on 28 July 2006. In terms of this employment
agreement
the first respondent commenced employment as branch manager of the
Bloemfontein branch of the applicants from approximately
1 August
2006. The first respondent resigned from her employment with the
applicants on 1 November 2007 with effect from 30 November
2007.
[6] The second respondent
entered into a written employment agreement with the applicants on 3
August 2005. In terms of this agreement
the second respondent
entered into the employment of the applicants as branch manager of
the Bloemfontein branch. As from 1 August
2006 the second respondent
served as area manager for the applicants for the Free State and
Northern Cape regions. As a result the
first respondent became the
branch manager of the Bloemfontein branch. On 18 October 2007 the
second was demoted to the position
of service consultant. There is a
dispute between the parties as to whether the second respondent was
permanently appointed as area
manager or not as well as in respect of
the validity of the demotion. These disputes are the subject of
proceedings in terms of
the Labour Relations Act that are not yet
finalised. However, on 5 December 2007, the second respondent
resigned from employment
with the applicants with immediate effect.
[7] On 18 January 2007
the third respondent entered into a written employment agreement with
the applicants. In terms of this agreement
the third respondent was
employed by the applicants as contract manager in Bloemfontein with
the main duties and functions of serving
customers, obtaining new
customers, including the recruitment, interviewing and placement of
employees. The third respondent resigned
from his employment with
the applicants on 2 November 2007 with effect from 2 December 2007.
[8] It
is common cause that the fourth respondent is a direct competitor of
the applicants in Bloemfontein and that the market in
which they
compete is a highly competitive one. It is also common cause that
shortly after their respective resignations, the first,
second and
third respondents entered into the employ of the fourth respondent in
Bloemfontein. The first respondent is now the national
sales and
marketing manager of the fourth respondent, but manages and controls
the fourth respondent’s Bloemfontein branch. The
second respondent
is the area manager of the fourth respondent responsible for the Free
State and Northern Cape regions. The third
respondent is employed by
the fourth respondent as contract manager since 3
December
2007.
[9] I deal firstly with
the applicants’ case against the first, second and third
respondents. The employment contract of each of
these three
respondents with the applicants contains the following provisions:
“
10. RESTRAINTS
10.1 The Employee shall at all times
throughout the employment and forever thereafter:
10.1.1 keep confidential and refrain
from divulging the confidential information and every part thereof to
anybody and everybody whomsoever,
save only to the extent that the
performance of the duties of the employment necessitate his acting
otherwise;
10.1.2 refrain
from exploiting the confidential information or causing it to be
exploited, in whole or in part, except in the course
of the duties of
the employment;
10.1.3 refrain
from disclosing either directly or indirectly to any person, firm or
company;
10.1.3.1 any information relating to
the details of the business of the Company;
10.1.3.2 any
information relating to any customer, worker, employee or persons
with whom the employee has dealt with while in the
employ of the
Company;
10.2 The Employee shall at all times
throughout the employment and, throughout the period of two years
immediately following the termination
date, howsoever and whenever
the employment terminates:
10.2.1 keep confidential and refrain
from divulging the know-how and every part thereof to anybody and
everybody whomsoever, save
only to the extent that the performance of
the duties of the employment necessitate his acting otherwise;
10.2.2 refrain
from exploiting the know-how or causing it to be exploited except in
the course of the duties of the employment.
10.3 The Employee shall not at any
time during the employment, and throughout the period of two years
immediately following the termination
date, howsoever and whenever
the employment terminates, either for his own account or benefit or
for any other person, solicit the
custom of, interfere with, or
endeavour to entice from the Company or the Group:
10.3.1 any
worker;
10.3.2 any
employee;
10.3.3 any
customer;
10.3.4 any personnel registered with
the Company for placement by the latter either in permanent,
temporary or contract labour, whilst
the employee is in the employ of
the Company.
10.4 The Employee undertakes that he
shall not for the period of two years after the termination of his
employment, howsoever and
whenever the employment terminates, with
the Company:
10.4.1 directly or indirectly, and
whether alone of with another or others, and whether or not for his
own sole or partial benefit
or the benefit solely or partially of
others, carry on or be engaged, employed or financially interested in
any business which:
10.4.1.1 at any time during that
period competes with the business conducted by the Company and
10.4.1.2 conducts such business within
fifty kilometer radius from any office/branch where the Employee was
employed or at which the
Employee undertook or was given any
responsibility during the duration of his employment with the
Company.
10.4.2 whether for his own benefit or
that of any other person, firm or company solicit the custom, of
interfere with, or endeavour
to entice from the Company any customer
with whom the Company has;
10.4.2.1 conducted business during 12
months prior to the termination of the Employee’s employment with
the Company; or
10.4.2.2 conducted
business during the course of the Employee’s employment with the
Company; or
10.4.2.3 entered
into negotiations with a view to conducting business with that
customer within six months prior to the termination
of the
Employee’s employment with the Company;
10.4.3 furnish any
information or advice (oral or written), to any customer or use any
other means or take any other action which
is directly or indirectly
designed, or in the ordinary course of events calculated, to result
in any customer terminating his association
with the Company and
transferring his business to any person other than the Company.
10.5 The Employee acknowledges that
the aforegoing restraints are fair and reasonable in the
circumstances and reasonably required
for the protection of the
Company’s proprietary interests.
10.6 The
Employer acknowledges that the provisions of clause 10 have been
carefully considered and the Employee agrees that the undertakings
given by the obligations imposed on the Employee are in the
circumstances reasonable and necessary for the protection of the
interest
of the Company and the Group and the members thereof.
Should the employee dispute that the provisions are reasonable or
contend
that they are unreasonable then the onus of proving such
unreasonableness will rest upon the Employee.”
[10] Following
the cue of clause 10 of each of the employment agreements in
question, quoted above, the applicants in the notice of
motion moved
for wide-ranging and overlapping orders against the first, second and
third respondents. Analysis of the said clause
however shows (in
clause 10.4 thereof) that each of the first, second and third
respondents undertook that he or she shall not for
a period of two
years after the termination of his or her employment with the
applicants whenever and for whatever reason, be employed
in a
business that competes with the applicants within a radius of 50
kilometres from the applicants’ Bloemfontein branch. For
the sake
of convenience I will refer to this provision as the restraint of
trade clause. Secondly, it appears that the said clause
10 contains
provisions designed to protect confidential information of the
applicants as well as customer connections of the applicants.
[11] It is clear that the
essence of the case for the applicants against the first to third
respondents is that the applicants seek
to protect alleged
confidential information and customer connections by way of
enforcement of the restraint of trade clause and enforcement
of the
provisions protecting confidential information and customer
connections, alternatively on the basis of the common law principles
of unlawful competition.
[12] The
law in respect of the enforcement of a contractual provision such as
the restraint of trade clause in this case, is well
settled and can
especially be gleaned from the important judgments in the cases of
MAGNA
ALLOYS AND RESEARCH (SA) (PTY) LTD v ELLIS
[1984] ZASCA 116
;
1984 (4) SA 874
(A) and
BASSON
v CHILWAN AND OTHERS
[1993] ZASCA 61
;
1993 (3) SA 742
(A). In essence, a restraint of trade clause will
not be enforced if to do so would offend against public policy. As a
general
rule it is against public policy to enforce a contractual
provision that places an unreasonable restraint on an ex-employee to
be
employed or to take part in trade or commerce. A restraint of
trade provision will be unreasonable if it does not properly serve
to
protect a protectable interest of the employer. Whether, as is the
case here, the parties agreed or recorded that the restraint
is in
fact reasonable, is not decisive of the matter. It is also trite
that the interests that the applicants seek to protect, namely
confidential information and customer connections, are in principle
protectable interests worthy of protection by a contractual provision
in restraint of trade.
[13] In
the
MAGNA
ALLOYS
-case
it was decided that the onus in a case such as this is on the
respondent to show that it would be against public policy to enforce
the restraint clause. Counsel for the respondents expressly accepted
that the provisions of the Constitution, particularly sections
22 and
36(1) thereof, did not bring about a change in this regard. I think
that this submission was properly made. This was the
approach
followed in two decisions of this Court, to wit
WALTONS
STATIONERY CO (EDMS) BPK v FOURIE EN 'N ANDER
1994 (4) SA 507
(O) at 511 E – H and
POLYGRAPH
CENTER-CENTRAL PROVINCES CC v VENTER AND ANOTHER
[2006] 4 ALL SA 612
(O) at 615 e – f and 617 par. [21]. I am bound
by these judgments, unless I am convinced that they are wrong. I am
by no means
so convinced. The onus is therefore on the first to
third respondents to show on a balance of probabilities that it would
offend
against public policy to enforce the restraint of trade
clause. This onus includes showing the absence of any protectable
interest
on the part of the applicants. See
RAWLINS
AND ANOTHER v CARAVANTRUCK (PTY) LTD
[1992] ZASCA 204
;
1993 (1) SA 537
(A) at 541 B. See also
BRIDGESTONE
FIRESTONE MAXIPREST LTD v TAYLOR
[2003] 1 ALL SA 99
(N) at 302 j to 303 b and
POLYGRAPH
CENTER-CENTRAL PROVINCES CC v VENTER AND ANOTHER
,
supra
at 618 par. [29]. As the applicants seek final relief in application
proceedings, factual disputes must be dealt with in accordance
with
the principles set out in
PLASCON-EVANS
PAINTS LTD v VAN RIEBEECK PAINTS (PTY) LTD
[1984] ZASCA 51
;
1984 (3) SA 623
(A) at 634 H – 635 C, even where the onus is on
respondents. See
NGQUMBA
EN 'N ANDER v STAATSPRESIDENT EN ANDERE; DAMONS NO EN ANDERE v
STAATSPRESIDENT EN ANDERE; JOOSTE v STAATSPRESIDENT EN ANDERE
1988 (4) SA 224
(A) at 260 I – 263 D.
[14] Not
every connection or relationship between business people and clients
or customers is worthy of protection. After all, as
a general rule
every person is entitled to freely carry on his trade or business in
competition with his rivals. See
SCHULTZ
v BUTT
1986 (3) SA 667
(A) at 678 F – G. It has often been said that
competition is the lifeblood of commerce. Compare
TAYLOR
& HORNE (PTY) LTD v DENTALL (PTY) LTD
1991 (1) SA 412
(A) at 421 J – 422 B. Customer connections or
trade connections qualify for protection only where there is a
particular and special
relationship between the employee and the
customers of the kind described in
RAWLINS
AND ANOTHER v CARAVANTRUCK (PTY) LTD
,
supra
at 541 D – H as follows:
“The
need of an employer to protect his trade connections arises where the
employee has access to customers and is in a position
to build up a
particular relationship with the customers so that when he leaves the
employer's service he could easily induce the
customers to follow him
to a new business (Joubert
General
Principles of the Law of Contract
at 149). Heydon
The
Restraint of Trade Doctrine
(1971) at 108, quoting an American case, says that the 'customer
contact' doctrine depends on the notion that
'the
employee, by contact with the customer, gets the customer so strongly
attached to him that when the employee quits and joins
a rival he
automatically carries the customer with him in his pocket'.
In
Morris
(Herbert) Ltd v Saxelby
[1916] 1 AC 688
(HL) at 709 it was said that the relationship must be
such that the employee acquires
'such
personal knowledge of and influence over the customers of his
employer . . . as would enable him (the servant or apprentice),
if
competition were allowed, to take advantage of his employer's trade
connection . . .'.
This
statement has been applied in our Courts (for example, by Eksteen J
in
Recycling
Industries (Pty) Ltd v Mohammed and Another
1981 (3) SA 250
(E) at 256C-F). Whether the criteria referred to are
satisfied is essentially a question of fact in each case, and in
many, one of
degree. Much will depend on the duties of the employee;
his personality; the frequency and duration of contact between him
and the
customers; where such contact takes place; what knowledge he
gains of their requirements and business; the general nature of their
relationship (including whether an attachment is formed between them,
the extent to which customers rely on the employee and how
personal
their association is); how competitive the rival businesses are; in
the case of a salesman, the type of product being sold;
and whether
there is evidence that customers were lost after the employee left
(Heydon (
op
cit
at 108-120); and see also
Drewtons
(Pty) Ltd v Carlie
1981 (4) SA 305
(C) at 307G-H and 314C and G).”
[15] On
the papers before me I can find no evidence of the existence of such
relationships between any of the first, second and third
respondents
and any of the customers of the applicants, not even on the case for
the applicants. In this regard counsel for the
applicants
particularly relied on the evidence of the third respondent to the
effect that he built up a personal relationship with
members of the
staff of Premier Foods Ltd t/a Blue Ribbon Bakeries at Bloemfontein
(“Blue Ribbon Bakeries”). I think that this
reliance is
misplaced. From the evidence of the third respondent it is clear
that a casual relationship developed between himself
and two
employees of Blue Ribbon Bakeries. Moreover, the fact of the matter
is that on the evidence on behalf of the respondents
that I have to
accept for purposes of decision of this application, Blue Ribbon
Bakeries formally became a customer of the fourth
respondent with
effect from 1 November 2007, that is before the resignation of the
third respondent from the employ of the applicants.
In my view the
respondents have shown that the applicants have no customer
connections worthy of being protectable interests for
purposes of the
restraint of trade clause. The restraint of trade clause therefore
cannot serve to protect the applicants’ customer
connections.
[16] The
judgment in the case of
ALUM-PHOS
(PROPRIETARY) LIMITED v SPATZ AND ANOTHER
[1997] 1 ALL SA 616
(W) at 623 g to j contains a concise summary of
the requirements for information to qualify as confidential
information in this field,
which I respectfully and gratefully adopt.
These requirements are, firstly, that information must involve and
be capable of application
in trade or industry, that is it must be
useful. Second, it must not be public knowledge or public property,
in other words, it
must be known only to a restricted number of
people. Third, the information must objectively determined be of
economic value to
the person seeking to protect it. The nature of
the information is irrelevant. If it complies with these
requirements it is confidential.
[17] The applicants say
that with time and effort over many years they compiled a database
consisting of customer files and employee
list and files in respect
of their customers and employees. The customer files contain in
respect of a specific customer the contact
persons and contact
details and the specific needs and requirements of the customer with
specific reference to requirement patterns
of the customer,
categories of staff used as well as pay rates. Each employee file
contains a profile of the employee which includes
the qualifications,
experience and salary requirements of the employee as well as the
history of previous placements. None of this
is disputed by the
respondents. I accept that it is possible that this information may
be gathered by others, but it will take considerable
time and effort.
As I have said, it is the essence of the business of a labour broker
to bring the right employees to the right
customers. It is clear to
me that the customer files and employee files of the applicants
enable the applicants to speedily determine
which employees will best
suit or serve the needs of each customer. On this basis the contents
of the customer files and employee
files of the applicants emanating
from its Bloemfontein branch constitute confidential information that
comply with the abovementioned
test. I am convinced, even on the
basis that it has to be shown by the applicants, that this
confidential information is a protectable
interest sufficient to
uphold the restraint of trade clause.
[18] It is clear that the
first, second and third respondents were privy to this confidential
information and that in respect of each
of them there is a risk of
the use or disclosure thereof. This was particularly illustrated by
the manner in which the first respondent
dealt in her answering
affidavit with each and every customer referred to by the applicants,
exhibiting a thorough knowledge of the
circumstances, needs and
requirement of each and every customer. Moreover, on 18 December
2007 both the second respondent and the
third respondent were found
in possession of documents of the applicants containing confidential
information of the applicants of
the kind described above. The
explanations offered for this by both the second respondent and the
third respondent are quite unconvincing.
The second respondent
stated that she gathered and kept each and every document of the
applicants that she could lay her hands on,
in order to make use
thereof as exhibits in the aforesaid labour dispute before the CCMA.
However, the documents containing information
in respect of the
customers and employees of the applicants could by no stretch of
imagination be relevant to the decision of this
dispute. This is
borne out by the fact that the bundle of documents prepared for
purposes of use on behalf of the second respondent
at the CCMA
proceedings, did not contain customer and employee lists or files or
information and the fact that an arbitration award
had already been
made in favour of the second respondent on 15 November 2007. The
third respondent simply says that he could see
no reason to return
the applicants’ documents to it after his resignation even though
these documents, for instance, included many
names and particulars of
customers and employees of the applicants.
[19] In
a case such as the present the applicants does not have to show that
the first, second and third respondent have in fact utilised
information confidential to it, it suffices that the respondents
could do so, as pointed out above. In such a case the breach of
the
restraint of trade clause is the injury actually committed for
purposes of a final interdict. In
BHT
WATER TREATMENT (PTY) LTD v LESLIE AND ANOTHER
1993 (1) SA 47
(W) at 57 J – 58 B the following was said:
“In
my view, all that the applicant can do is to show that there is
secret information to which the respondent had access, and which
in
theory the first respondent could transmit to the second respondent
should he desire to do so. The very purpose of the restraint
agreement was that the applicant did not wish to have to rely on the
bona fides or lack of retained knowledge on the part of the
first
respondent, of the secret formulae. In my view, it cannot be
unreasonable for the applicant in these circumstances to enforce
the
bargain it has exacted to protect itself. Indeed, the very ratio
underlying the bargain was that the applicant should not have
to
content itself with crossing its fingers and hoping that the first
respondent would act honourably or abide by the undertakings
that he
has given.
In
my view, an ex-employee bound by a restraint, the purpose of which is
to protect the existing confidential information of his
former
employer, cannot defeat an application to enforce such a restraint by
giving an undertaking that he will not divulge the information
if he
is allowed, contrary to the restraint, to enter the employment of a
competitor of the applicant. Nor, in my view, can the ex-employee
defeat the restraint by saying that he does not remember the
confidential information to which it is common cause that he has had
access. This would be the more so where the ex-employee, as is the
case here, has already breached the terms of the restraint by
entering the service of a competitor.”
This
passage was expressly approved of by the Supreme Court of Appeal in
REDDY
v SIEMENS TELECOMMUNICATIONS (PTY) LTD
2007 (2) SA 486
(SCA) at p. 500.
[20] The
respondents did not attack the reasonableness of the 50 kilometre
radius from Bloemfontein or the period of two years of
the restraint
of trade clause as such. The first respondent is 49 years of age.
She was previously employed, for considerable periods
of time, as an
accountant and as a human resources manager. It seems that she only
entered the field of labour broking in August
2006, when she entered
into the employment of the applicants. The second respondent is
nearly 40 years old. Similarly she was previously
employed,
inter
alia
,
as a branch manager of a life insurance company in Bloemfontein, as
financial manager of a bottling plant and she was a partner
in a
furniture manufacturing business. It would also appear that the
second respondent only entered the field of labour broking
when she
entered into the employment of the applicants in August of 2005. The
third respondent is 24 years of age and held several
positions before
he took up employment with the applicants during January 2007.
Before that date the third respondent worked as
a cashier, an
administrative officer and a branch manager of a health care
business. It would not seem therefore that if the restraint
of trade
clause is enforced, the first, second and third respondents would not
be able to obtain other employment. In all these
circumstances, the
first, second and third respondents have not convinced me that it
would be contrary to public policy to enforce
the restraint of trade
clause.
[21] It follows from what
I have said before that no order can be granted in respect of
protection of customer connections. By the
same token, the
provisions in the respective employment contracts designed to protect
confidential information should be enforced.
In this regard, I
prefer not to issue an order in accordance with the rather convoluted
form of the relevant contractual provisions
and the notice of motion.
A simple and understandable order that prohibits the use or
disclosure of the applicants’ stated confidential
information in
any manner, would suffice.
[22] The applicants seek
the following order against the fourth respondent:
“
4. The Fourth
Respondent is hereby interdicted and restrained from directly and/or
indirectly:-
4.1 inducing or procuring any one or
more of the First, Second or Third Respondents to breach any of the
provisions of their respective
contracts of employment entered into
between them and the Applicants;
4.2 soliciting,
canvassing, seeking contracts from, interfere with, or endeavour to
entice from the Applicants the custom of Blub
Ribbon Bakeries trading
as Premier Foods Limited until 30 November 2009;
4.3 exploiting
the Applicants’ trade secrets, know-how, techniques, methods and
systems and/or confidential information, or any
part thereof, and
customer connections (whether orally, in writing or otherwise) in
whole or in part;
4.4 unlawfully
competing with the Applicants by, in any way, wrongfully interfering
with and/or exploiting and/or misusing the Applicants’
trade
secrets, know-how, techniques, methods and systems and/or
confidential information, or any part thereof, and customer
connections
(whether orally, in writing or otherwise) or causing
interference with, misuse and/or exploitation of the aforementioned,
in whole
or in part, to, in anyway advance the Fourth Respondent’s
business or interests and activities at the expense of the
Applicants;”
[23] As
stated already, it must be accepted for purposes of the determination
of this application that Blue Ribbon Bakeries became
a customer of
the fourth respondent with effect from 1 November 2007. Even if it
is presently accepted for purposes of argument
that unlawful
competition was involved as the applicants allege, that which the
applicants seek to prohibit by paragraph 4.2, quoted
above, has
already taken place. An interdict is not a remedy for a past
invasion of rights. See
STAUFFER
CHEMICALS CHEMICAL PRODUCTS DIVISION OF CHESEBROUGH-PONDS (PTY) LTD v
MONSANTO COMPANY
1988 (1) SA 805
(T) at 809 F – G and
PHILIP
MORRIS INC AND ANOTHER v MARLBORO SHIRT CO SA LTD AND ANOTHER
1991 (2) SA 720
(A) at 735 B. In any event, on the applicants’
case, a claim for damages in respect of the loss of business of Blue
Ribbon Bakeries
appears to be a suitable and viable alternative
remedy.
[24] It is important to
note that the case against the fourth respondent is not based on
contract but on common law principles of
unlawful competition. In
view of what I have already indicated only the confidential
information referred to above, needs to be
considered. The onus is
therefore on the applicants to show on a balance of probabilities on
the papers that the fourth respondent
is making use thereof or is
reasonably apprehended to do so. I am not at all satisfied that this
was proved. In my view, there
is no evidence on which a finding can
be made that the fourth respondent makes use of the applicants’
confidential information
or is likely to do so. In any event, it
would seem that any need for an order against the fourth respondent
falls away in view of
the orders that I intend to make against the
first, second and third respondents.
[25] The applicants also
moved for orders that the first, second and third respondents deliver
all documents and information of the
applicants in their possession
and that they file an affidavit with the registrar of this Court that
they have done so. It is of
course not possible to issue an order
that information, as opposed to documentation, be so delivered.
However, each of the first,
second and third respondents have
testified under oath before me that after the execution of the order
under case no. 6762/2007,
they do not have any documentation of the
applicants in their possession. There is no reason to doubt these
statements and it must
be accepted for purposes of the decision of
this application. There is therefore no basis for these orders.
[26] The respondents did
not oppose an order that the documentation seized in terms of the
aforesaid order be handed over to the applicants
or their duly
authorised representative.
[27] The applicants are
materially successful in their case against the first, second and
third respondents. Therefore, the first,
second and third
respondents should jointly and severally be ordered to pay the
applicants’ costs of this application. In clause
14 of the written
employment agreement of each of the first, second and third
respondents with the applicants, it was agreed that
costs incurred by
the applicants in enforcing its rights under the employment
agreement, shall be borne on the scale as between attorney
and
client. There is no valid reason not to enforce this agreement in
respect of this application. The first, second and third
respondents
should also be ordered to pay the costs of application no. 6762/2007,
jointly and severally. I am not satisfied that
the costs of that
application can validly be said to fall within the ambit of clause 14
of the employment agreements. The applicants
must, jointly and
severally, pay the costs of the fourth respondent.
[28] The following orders
are issued:
1. The forms and service
provided for in the Rules of Court are dispensed with and the matter
is heard as one of urgency.
2. The
first, second and third respondents are interdicted and restrained
from using or disclosing in any manner the applicants’
confidential
information consisting of or emanating from their Bloemfontein branch
customer files and employee files.
3. The first respondent
is interdicted and restrained until 30 November 2009 from directly or
indirectly, and whether alone or with
another or others, and whether
or not for her own sole or partial benefit or the benefit solely or
partially of others, carrying
on or being engaged, employed or
financially interested in any business which at any time during that
period competes with the business
conducted by the applicants and
conducts such business within a 50 kilometre radius from the
applicants’ Bloemfontein branch.
4. The second respondent
is interdicted and restrained until 5 December 2009 from directly or
indirectly, and whether alone or with
another or others, and whether
or not for her own sole or partial benefit or the benefit solely or
partially of others, carrying
on or being engaged, employed or
financially interested in any business which at any time during that
period competes with the business
conducted by the applicants and
conducts such business within a 50 kilometre radius from the
applicants’ Bloemfontein branch.
5. The
third respondent is interdicted and restrained until 2 December 2009
from directly or indirectly, and whether alone or with
another or
others, and whether or not for his own sole or partial benefit or the
benefit solely or partially of others, carrying
on or being engaged,
employed or financially interested in any business which at any time
during that period competes with the business
conducted by the
applicants and conducts such business within a 50 kilometre radius
from the applicants’ Bloemfontein branch.
6. The sheriff of this
Court is authorised to release all documentation seized in terms of
the order in application no. 6762 of 2007
and to hand same over to
the applicants or their duly authorised representative.
7. The first, second and
third respondents are ordered, jointly and severally, to pay the
applicants’ costs of this application
on the scale of attorney and
client.
8. The first, second and
third respondents are ordered to pay the costs of application no.
6762/2007, jointly and severally.
9. The applicants are
ordered to pay the fourth respondent’s costs of this application,
jointly and severally.
________________________
C.H.G. VAN DER MERWE,
J
On
behalf of the applicants: Adv. L.M. Malan
Instructed
by:
Symington
& De Kok
BLOEMFONTEIN
On
behalf of the respondents: Adv. F.W. Botes
Instructed
by:
Rosendorff
Reitz Barry
BLOEMFONTEIN
/sp