Bloomberg Orthopaedics & Neurosciences (Pty) Limited v Vermaak and Another (3511/2005) [2006] ZAFSHC 40 (12 October 2006)

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[2006] ZAFSHC 40
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Bloomberg Orthopaedics & Neurosciences (Pty) Limited v Vermaak and Another (3511/2005) [2006] ZAFSHC 40 (12 October 2006)

IN THE HIGH COURT
OF SOUTH AFRICA
(ORANGE FREE STATE
PROVINCIAL DIVISION)
Case No.: 3511/2005
In
the case between:
BLOOMBERG
ORTHOPAEDICS &
Applicant
NEUROSCIENCES
(PTY) LIMITED
and
MARIZE VERMAAK
1
st
Respondent
FLUOROVIZION
(PTY) LTD
2
nd
Respondent
JUDGMENT:
EBRAHIM, J
_____________________________________________________
HEARD ON:
28 SEPTEMBER 2006
_____________________________________________________
DELIVERED ON:
12 OCTOBER 2006
_____________________________________________________
[1] This is an
application in which the applicant seeks to enforce the provisions of
a restraint of trade agreement concluded between
it and the first
respondent. The second respondent was not a party to this agreement.
The applicant seeks not only to interdict
the second respondent from
employing the first respondent but it also seeks to have the
respondents pay the costs of the application
jointly and severally.
[2] The
terms of the agreement on which this application is founded provides
that the first respondent is restrained for a period
of 6 months
after the termination of her employment with the applicant from being
involved or engaged in any business or undertaking
which carries on
business in competition with the applicant.
[3] Consequently
it follows that for the restraint to be valid and for the applicant
to invoke any rights flowing from the restraint
the applicant must
first prove that the second respondent is a trade competitor of the
applicant. The second respondent has denied
that it carries on
business in competition with the applicant.
[4] The
first respondent has not opposed the application. It is common cause
between the parties that she is not in the employ of
the second
respondent although it appears from the papers that second respondent
had, prior to this application being launched, been
engaged in
discussions with first respondent with a view to entering into a
contract of employment with her.
[5] An
applicant who approaches this court for relief on the basis of a
restraint clause prohibiting a respondent from employing an
erstwhile
employee of the applicant because the said respondent is engaged in
business in competition with the applicant, must first
place
sufficient factual particularity of such competition before the
court. An analysis of the applicant’s case reveals the following:
5.1 The applicant has
failed to disclose its product list or its price list or any other
list from which it may be determined whether
or not the applicant and
the second respondent are in fact competitors.
5.2 The
applicant has made broad generalisations in stead of setting out
facts referring to the competition which exists between itself
and
the second respondent. Such generalisations are the following:
“
The
applicant has been involved in the research and development of
competitive products for many years.”
“The applicant
carries on the business of the importation, manufacturing,
distribution and sale of an extensive range of surgical
orthopaedic
and neuroscience products throughout South Africa.”
5.3 The applicant has in
fact attached to his application in support of its allegations that
the second respondent is in competition
with it, a product list
belonging to the second respondent detailing the list of products
which second respondent trades in. In
addition the applicant has
annexed as a product list to its replying affidavit a list which
refers to medical procedures rather than
medical products. This list
fails hopelessly to qualify as a product list of the applicant. The
fact that this list surfaces for
the very first time as an annexure
to the applicant’s case in reply also does not inspire much
confidence in the strength of the
applicant’s case. It is a
well-known principle that in application procedures an applicant must
stand or fall by his founding
affidavit and all facts alleged in it
as those are the facts which the respondent is called upon to admit
or deny.
See
POUNTAS’
TRUSTEES v LAHANAS
1924 WLD 67
at 68.
Nowhere in the founding
papers does the applicant make reference to such a list. In fact,
from a reading of the applicant’s founding
papers, it is apparent
that the applicant’s entire case is premised on the product list of
the second respondent. Having regard
to the nature of the product
list furnished in reply, the inference appears to be inescapable that
the applicant, on being informed
of the second respondent’s
dealings with the first respondent, got the “bit between the
teeth” and ran with it, so to speak.
In bringing this application
the applicant appears to have ignored the pre-conditions of the
restraint that first respondent is
only prohibited from seeking
employment with one who carries on business in competition with the
applicant. No proper investigation
to establish this was undertaken
by the applicant prior to the application being launched. That being
so, I think it would be grossly
unfair to the second respondent were
I to exercise my discretion in favour of allowing the so-called
product list annexed in reply
to be admitted in evidence. The list
in any event, does not assist the applicant in its case.
[6] In the circumstances
I find that the applicant has failed to prove that the second
respondent is in competition with it and the
application must
accordingly fail. I have been asked by both counsel to make a ruling
in respect of costs occasioned by the several
postponements which
resulted from second respondent’s failure to timeously file its
answering papers. These papers were eventually
filed on the 16
th
of February 2006 after an application to Compel Discovery of
applicant’s product list and business plan had been brought by the
second respondent. That application was heard and argued before me
on the 11
th
of May 2006 and I reserved the costs of that
application for determination at the hearing of this main
application. In light of
my decision to dismiss the entire
application, it is only proper that the costs should follow the
result. Accordingly I order that
the applicant is to bear the costs
of the entire application, inclusive of the costs of each
postponement and the costs of the application
to compel.
[7] In
the result the order I make therefor is that the application is
dismissed with costs.
_____________
S. EBRAHIM, J
On
behalf of the Applicant: Adv. P.U. Fischer
Instructed by:
McIntyre & Van der Post
BLOEMFONTEIN
On
behalf of the Respondents: Adv. M. Welz
Instructed
by:
Lovius Block
BLOEMFONTEIN
/em