IN THE HIGH COURT OF SOUTH AFRICA
WESTERN CAPE DIVISION, CAPE TOWN
CASE NO: 23149/23
TRUE NORTH HOLDINGS (PTY)
LIMITED
First Applicant
CASH CONVERTERS SOUTHERN
AFRICA (PTY) LIMITED
Second Applicant
TRUE NORTH FRANCHISING (PTY)
LIMITED
Third Applicant
and
SKY GECKO SOFTWARE LAB (PTY)
LIMITED
First Respondent
GLYNN-ROBERT HENDRICKS Second Respondent
REASONS FOR THE DISMISSAL OF THE APPLICATION FOR REFERRAL TO ORAL EVIDENCE
AND JUDGMENT IN THE APPLICATION FOR INTERIM RELIEF
KATZ AJ:
Introduction
[1] In this matter important and unusual procedural issues have arisen. Certain
aspects of t he conduct of the applicants in the se proceedings are not only
intriguing and inexplicable, but unfortunate. And some of th eir conduct may
constitute an abuse of process.
[2] In simple terms, the applicants brought what they regard as an urgent or semi
urgent application, and then have done what they can to delay the finali sation
of the application.
[3] Dare I say that the certain of the steps adopted by the applicants is a model of
how not to litigate. To appreciate the serious difficulties, it will be necessary to
detail the course of the litigation.
[4] In saying this I accept that litigation is tough. Its results can have a long -
lasting impact on the lives of the parties and often the general population.
Hard c hoices by the parties often need to be made between numerous
possible routes. And the choices may involve decisions if , and when to take
certain steps. The choices often need to be made under time pressure and
other constraints.1 And each of the courses can have serious consequences
for the prospects of success and the nature and parameters of any order that
may be made.2
[5] This application comprises urgent or semi -urgent relief seeking a restraint of
trade3 and the interdicting the respondents from disclosing confidential
information4 by three separate companies playing different roles in the Cash
Converters franchise business. 5 An alternative prayer seeking interim relief
pending the determination of any issues that may be referred to oral evidence
or to trial was included in the notice of motion.
1 Examples include whether to engage senior counsel, and if so at what stage. And whether to only
engage out of town counsel.
2See the comments of the Constitutional court in S v Dlamini, S v Dladla and Others; S v Joubert; S v
Schietekat (CCT21/98, CCT22/98 , CCT2/99 , CCT4/99) [1999] ZACC 8; 1999 (4) SA 623; 1999 (7)
BCLR 771 (3 June 1999) at paras [93] – [94].
3 For twenty-four months from the date of any order the Court makes.
4 The confidentiality relief was final and included a prayer for the return of the confidential information.
5 A further prayer concerning the infringement of copyright of one of the applicants was abandoned.
[6] The business comprises the buying and selling of second -hand goods, limited
new wholesale goods and the provision of short -term credit, and in particular
pawn loans.
[7] It is said that the business requires sophisticated information technology
related services to comply with a suite of legislative requirements, such as the
National Credit Act and taxation associated laws.
[8] The respondents are Glynn-Robert Hendricks (an individual) and his alter
ego, a company called Sky Gecko Software Lab . They entered into various
contractual arrangements with Cash Converters as consultants . Their
services were for the provision of the information technology related services
required by Cash Converters, or at least certain of the applicants.
[9] In mid -October 2023 it came to the attention of Cash Converters that the
respondents were working with other businesses competing in the
marketplace with Cash Converters.
[10] After brief interaction, including a meeting and an exchange of
correspondence between the parties the contractual relationship between the
parties ended on 23 October 2023.
[11] Thereafter further correspondence flowed between them. The essence was
that the applicants claimed that the respondents were in breach of a restraint
of trade and were in violation of confidentiality provisions. The respondents in
effect denied the claims.
The parties and the franchise agreement
[12] The first applicant, True North Holdings (Pty) Limited is the holding company
of the “Cash Converters Group” of companies and holds one hundred percent
of the issued share capital in the second and third applicants.
[13] The second applicant, Cash Converters Southern Africa (Pty) Limited, is the
operational arm of the franchise business and holds the franchise rights in
respect of the franchised group of Cash Converters stores throughout
Southern Africa.
At present there are a total of ninety stores – in Southern Africa (eighty -six
stores) and Namibia (four stores). The second applicant stands in a direct
contractual relationship with each franchisee in terms of a written franchise
agreement that delineates the rights and obligations of the parties. It receives
a royalty based on the percentage of retail turnover charged to the
franchisees and a fixed percentage royalty on the pawn fees generated by the
franchisees.
[14] The third applicant, True North Franchising (Pty) Limited, plays an operational
support role to each franchisee by licensing a bouquet of software
applications including the computer programs while it charges the franchisees
a monthly software license fee for use of the bouquet of software applications.
[15] The first respondent is Sky Gecko (Pty) Limited, and the second respondent is
Glynn Roberts – Hendricks, who is a director of the first respondent, and the
sole shareholder of the first respondent.
[16] Numbering about 90 stores owned by 78 separate legal entities, the heart of
the franchised system is that the Cash Converters franchisees operate their
business within the second -hand goods sector, pawnbroking industry, and
unsecured short-terms loans industry.
[17] The franchises employ the operational and technological platform granted to
them under the auspices of the second and third applicants.
[18] Unlike a pawnbroker or micro -lender that start a business operation de novo,
franchisees are immediately allowed the benefit of the accumulation of years
of intellectual capital and unique technology that they would not otherwise
have been exposed to, but for the fact that they enjoy the status of franchisee
under a franchise agreement. This is the unique benefit arises from the
franchise relationship.
[19] In terms of the standard franchise agreement:
(i) the franchisor (the second applicant) granted the franchisee the right to
operate the Franchised Business (defined as the business of a
franchised pawnbroker and/or second -hand dealer and/or money
lender to be conducted in terms of the franchise agreement) for the
terms of the agreement under the Franchise System (defined to mean
the franchisor’s specialised system for the operation, management and
promotion of a business incorporating the use and application of the
Intellectual Property (defined to include know-how, all confidential,
technical and commercial information relating to the operation of the
Franchise System and the Franchise Business), copyright, goodwill
(defined as the goodwill arising out of the Franchise System and the
Intellectual property by the franchisor and/or franchisee, trade dress,
trademarks and trade secrets);
(ii) the franchisee undertook not to engage or become concerned in the
promotion, organisation or similar business to the Franchise Business;
and
(iii) the franchisee undertook not to be party to any act or omission
whereby the goodwill or trade of the Franchise Business, the
Franchisor or the Intellectual Property may be endangered, jeopardised
or prejudicially affected.
The litigation
[20] On 19 December 2023 this application was launched.
[21] The notice of motion does not include a date for the hearing of the matter ,
despite the inclusion of the usual prayer seeking condonation for non-
compliance regarding service and the time limits prescribed by the Rules, and
permitting the application to be heard on a “semi-urgent basis” in terms of rule
6(12). The respondents were given 5 days for the delivery of a notice of
intention to oppose and to file answering affidavits within 15 days of filing the
notice of intention to oppose. If those dates were not complied with then the
matter would be placed on the third division roll - that is the unopposed roll in
this Division - for hearing on 31 January 2024.
[22] The matter somehow, despite it being opposed, came before Kusevitsky J in
the urgent court on 31 January 2024 .6 By agreement the application was
postponed for hearing to 17 May 2024 on the semi -urgent roll. The
applicants did not apply for interim relief on 31 January 2024, and they
appeared satisfied for the application to be postponed for nearly five months
with no protection by way of interim interdict. A time - table was agreed to
which required, inter alia, the respondents to file their answering affidavits by
23 February 2024 and the applicants , their replying affidavits by 28 March
2024 with dates for the filing of heads of argument and practice notes , viz. the
applicants by 26 April 2024 and the respondents by 3 May 2024.
[23] The founding affidavit consisted of 225 paragraphs in 99 pages with
approximately 450 pages of annexures.
[24] To motivate the obtaining of a date on the urgent or semi-urgent roll t he
applicants’ deponent in the founding affidavit averred:
“217. Most businesses shut down now over the Christmas and New
Year period and the applicants do not think that the respondents
will do much harm to their business during this time. The
resultant effect is that there is no such urgency that requires the
intervention of this Court before the New Year. Having said that,
the applicants cannot await a hearing in the ordinary course
6 None of the counsel who appeared before the Court on 17 May 2024 could explain how it came
about that the matter came before Kusevitsky J on 31 January 2024. The closest the Court received
as to an explanation was that it was a mistake or that it was on the applicants’ insistence.
since the respondents would by then have effectively harmed
the Cash Converters business.
218. In this regard, I am advised that if the matter is brought in the
ordinary course the first hearing date on the opposed roll is likely
to only be in late 2024 which will largely render the relief
academic if the application is only heard then.”
[25] The answering affidavit of 40 pages (121 paragraphs) was signed on 27
February 2024, and a replying affidavit of 119 pages7 (259 paragraphs) was
signed on 26 April 2024.8
[26] Significantly, the lengthy replying affidavit made no mention of any bona fide
disputes of fact raised in the answering affidavit.
[27] The applicants filed their heads of argument and a practice note in
accordance with this Division’s Practice Directives on 26 April 2024.
[28] Once again there was no suggestion of any disputes, bona fide or otherwise
by the applicants.
[29] The applicants in their practice note effectively requested the Acting Judge
President to make an early allocation of a judge to hear the application
because the matter would be ready for argument on 17 May 2024, there were
remote prospects of the matter settling and the p leadings exceeded 500
pages (the full papers consisted of more than 900 pages including annexures)
[30] The respondents filed heads of argument and a practice note a week before
the hearing scheduled for 17 May 2024.
7 The replying affidavit was three times longer than the answering affidavit.
8 The applicants filed a few days out of time, whereas the respondents filed a month later without any
formal application for condonation, although the reasons for the lateness were fully set out in the
replying affidavit.
[31] Two days before the hearing of the application I sent the parties an email,
inter alia, stating.
“At the hearing of the above application on Friday 17 May 2024, it
would be appreciated if counsel could address me on at least the
following two aspects:
(i) The applicability of paragraph [80 of Minister of Environmental
Affairs and Tourism and Others v Phambili Fisheries (Pty) Ltd and
Another (32/2003, 40/2003) [2003] ZASCA 46; [2003] 2 All SA 616
(SCA) (16 May 2003), which reads:
“Replying affidavits
[80] There is one other matter that I am compelled to
mention – replying affidavits. In the great majority of cases
the replying affidavit should be by far the shortest. But in
practice it is very often by far the longest – and the most
valueless. It was so in these reviews. The respondents, who
were the applicants below, filed replying affidavits of
inordinate length. Being forced to wade through their
almost endless repetition when the pleading of the case is
all but over brings about irritation, not persuasion. It is time
that the courts declare war on unnecessarily prolix replying
affidavits and upon those who inflate them. “
I request this, bearing in in mind that, as I have it, the answering
affidavit consists of 40 pages, and 121 paragraphs (record, 598 - 637)
and the replying affidavit consists of 119 pages, and 259 paragraphs
(record 687 – 805) together with a further 100 pages of annexures.
Also, the founding affidavit consists of 99 pages, and 22 paragraphs.
(record 9 – 107) with annexures running from record 108 - to
effectively 575, taking into account the applicants’ supplementary
affidavit beginning at 576 -597]).”9
[32] The hearing was scheduled to commence at 10h00 on Friday 17 May 2024.
[33] At 08h36 on that morning (less than an hour and a half before the hearing
was to commence ) I received an email from the applicants’ Cape Town
correspondent attorneys attaching an application in terms of Rule 6(5)(g) read
with Rule 11 (the referral application) by the applicants.
[34] The referral application was for the issue of whether the applicants enjoy a
protectable interest for the purposes of the enforcement of contractual rights
provable by the applicants to be referred to oral evidence at a date and at a
time to be arranged with the Registrar.
[35] The referral notice included provisions concerning discovery and the filing of
notices regarding the tendering of expert evidence. 10 Discovery was to be
made within 21 days of the making of the referral order and the Registrar was
to direct that the hearing of oral evidence be heard on the semi urgent roll,
alternatively a date as directed by the Court.
[36] Notably the applicants’ referral application was not coupled with an application
for interim urgent relief of any kind at all . Although as I have mentioned
interim relief in the alternative was contemplated in the notice of motion.
[37] So: were the referral application to succeed it is difficult to conceive of the
main application being heard, let alone decided before the end of 2024, the
date by when the applicants averred the relief would have become largely
academic.
9 I sent a further email to the parties thereafter requesting submissions on certain cases, which are
not relevant for purposes of this judgment.
10 The notice of application was in line with the customary order of this nature developed in
Metallurgical and Commercial Consultants (Pty) Limited v Metal Sales Co (Pty) Limited 1971 (2) SA
388 (W).
[38] The basis for the application was set out in a short supporting affidavit.
[39] The motivation for the referral application was the affidavits “raised bona fide
disputes of fact which cannot be properly decided on affidavit.”
[40] The following averment was the high-water mark of why the referral
application was filed at such an extraordinarily late stage: “During the final
preparation of the hearing and on the advice of senior counsel, the applicants
were advised that the nature of the disputes which are the subject of this
interlocutory application are such that they cannot be decided on affidavit.”
[41] At the commence ment of the hearing the applicants moved for the refer ral
application. No written argument was provided to the Court.
[42] During the engagement several concerns were debated.
[43] The applicants could not assist the Court as to when the oral evidence they
sought to adduce could and would be heard. They did not know the next
available date that could be allocated for the hearing of the oral evidence.
When I put it to counsel that it was unlikely to be within the next few months
they could not disagree. In other words, the application could and would only
be argued well into the second half of 2024 at best for them. And even this is
doubtful.
[44] When I asked for an explanation for the lengthy and prolix replying affidavit,
the answer seemed to be: “Well there was bald denial by the respondents in
the answering affidavits, so it was necessary to explain in detail the relevant
issues in the replying affidavit.”
But if that were indeed so why would there be the need for oral evidence?
That question was not satisfactorily answered.
[45] I questioned whether exceptional circumstances were required for a referral at
this late stage. Again, no satisfactory response was forthcoming. It was not
clear whether exceptional circumstances were required, and if so , what they
were.
[46] Throughout the debate I gained the impression that the applicants took the
view that referral to oral evidence was there for the taking.
[47] When I asked what should the Court do if it took the view that there was no
bona fide dispute to justify the referral to oral evidence , I recall the answer
effectively being that the Court should be guided by the applicants’ view.
[48] The respondents’ stance to the application was instructive. Their attitude was
that a part of the main case should proceed to argument immediately , and
only were the applicants to be successful in that part should the application for
referral be considered. If the respondents succeeded in that first part of the
case that would be the end of the main application and the referral issue
would not arise.11
[49] Thus, it was not immediately apparent whether the respondents opposed the
referral application. Understandably so.
[50] While the case dragged on their impugned conduct could continue. A referral
to oral evidence would have suited their purpose. The main application would
be drawn out, and the issue of mootness would raise its head. And the
respondents could and would, if so minded, continue to operate in what the
applicants considered an unlawful manner. But by the nature of things the
respondents could not be seen to be supporting the referral because they said
they had a strong (unanswerable) case on the merits.
[51] I suggested in argument they were “hedging their bets ,” and that their
suggested course was a classic case of undesirable piece meal litigation.
The response was that they opposed the referral application.
11 Such an approach would result in the application being managed and dealt with in a piece meal
manner. This was clearly undesirable.
[52] I should mention that the applicants curiously had no difficulty with t heir main
application only being heard in 2025. They suggested that despite them
saying on oath that the application need ed to be resolved before late 2024
there would still be some benefit to them were the restraint and confidentiality
relief be granted in 2025.
[53] I stood the matter down for approximately forty minutes to consider the
referral application.
[54] I dismissed the referral application with costs of two counsel. I indicated that I
would give my reasons when delivering the judgment in the main case.
[55] Counsel for the applicants immediately asked for the matter to stand down so
they could take instructions, bearing in mind my ruling dismissing the referral
application. The matter stood down for approximately half an hour.
[56] At the resumed hearing the applicants indicated they intended to apply for
leave to appeal against my referral ruling and that because I hadn’t yet given
the reasons for the dismissal, they could not file the application for leave to
appeal at that stage.
And they then sought an interim interdict pending the application for leave to
appeal the referral ruling.
[57] I indicated that I would hear argument on the interim interdict and give
reasons for my refusal of the referral application and my judgment on the
interim application together.
[58] The respondents opposed the interim relief application. Argument on the
interim application proceeded. No written argument was provided.
[59] During argument, I pointed out that the relief in the main application was not
geared strictly speaking in its formulation for interim relief and there were
issues and cases referred to in oral argument which were not contained in any
of the written arguments. Both parties undertook to provide me with written
heads of argument and draft orders concerning the interim relief a week later,
that is by 24 May 2024. Counsel for both parties complied and submitted
useful heads.
[60] I turn to give a summary of applications for referral to oral evidence and the
reasons for my refusal.
[61] I will then deal with the application for interim relief.
Applications for referral to oral evidence - Rule 6(5)(g)
[62] Motion proceedings concern the resolution of legal issues based on common
cause facts.
[63] Unless it is interim relief that is sought or the circumstances are special ,
motions cannot be used to resolve factual issues because , inter alia, they are
not designed to determine probabilities.
[64] If the material facts are in dispute and there is no request for the hearing of
oral evidence, a final order will only be granted if the facts as stated by the
respondent together with the facts alleged by the applicant that are admitted
by the respondent, justify such an order.
[65] That is unless the court is satisfied that the respondent’s version consists of
bald or uncreditworthy denials, raises fictitious disputes of fact, is so
farfetched or so clearly untenable or so palpably implausible as to warrant its
rejection merely on the papers.
[66] If the court is satisfied as to the inherent credibility of the applicant’s factual
averments, it may proceed based on the correctness thereof and include this
fact among those upon which it determines whether the applicant is entitled to
the final relief sought.
[67] But in certain instances a court may refer a motion for the hearing of oral
evidence.
[68] The Rules provide for the referral to oral evidence.
Rule 6(5)(g) states: “Where an application cannot properly be decided on
affidavit the court may dismiss the application or make such order as it deems
fit with a view to ensuring a just and expeditious decision . In particular, but
without affecting the generality of the aforegoing, it may direct that oral
evidence be heard on specified issues with a view to resolving any dispute of
fact and to that end may order any deponent to appear personally or grant
leave for such deponent or any other person to be subpoenaed to appear and
be examined and cross -examined as a witness or it may refer the matter to
trial with appropriate directions as to pleadings or definition of issues, or
otherwise.” (emphasis added)
[69] A court, where an application cannot properly be decided on affidavit, may
make such order as it deems fit with a view to ensuring a just and expeditious
decision.
[70] Erasmus’ commentary on Rule 6(5)(g) includes the following:
“In resolving to refer a matter to evidence a court has a wide discretion.
In every case the court must examine an alleged dispute of fact and
see whether in truth there is a real dispute of fact which cannot be
satisfactorily determined without the aid of oral evidence; if this is not
done a respondent might be able to raise fictitious issues of fact and
thus delay the hearing of the matter to the prejudice of the applicant.
The test is a stringent one that is not easily satisfied. Vague and
insubstantial allegations are insufficient to raise the kind of dispute of
fact that should be referred for oral evidence.
A bare denial of the applicant’s allegations in his affidavits will not in
general be sufficient to generate a genuine or real dispute of fact. It has
been said that the court must take ‘a robust, commonsense approach’
to a dispute on motion and not hesitate to decide an issue on affidavit
merely because it may be difficult to do so. This approach must,
however, be adopted with caution and the court should not be tempted
to settle disputes of fact solely on the probabilities emerging from the
affidavits without giving due consideration to the advantages of viva
voce evidence.”
[71] In Lombaard v Droprop CC and Others (377/09) [2010] ZASCA 86; 2010 (5)
SA 1 (SCA); [2010] 4 All SA 229 (SCA) (31 May 2010) the SCA had occasion
to consider some of the issues arising in motions when oral evidence may be
called for to resolve material disputes of fact.
[72] Heher and Shongwe JJA (dissenting12) stated:
“[29] It has long been recognised that a discretion resides in a high
court, derived from the rules of court, to refer a disputed issue of
fact which cannot be decided on affidavit for the hearing of oral
evidence regardless of whether the parties request it. The
present uniform rule is 6(5)(g). The overriding
consideration in the exercise of the discretion is ensuring a
just and expeditious decision. In short, in the case of a
dispute of fact, the court must be persuaded that the
hearing of evidence will be fair to the parties and will
conduce to an effective and speedy resolution of the
dispute and the overall application.”
(emphasis added)
[73] A full bench of this Court (Binns-Ward, Samela and Francis JJ) upheld in
Repas v Repas (A151/2022) [2023] ZAWCHC 24 (13 February 2023) an
appeal against the dismissal by Hockey AJ an application for the dissolution
12 The majority (Navsa and Malan JJA, Mhlantla JA concurring) did not disagree with the minority on
this aspect.
and winding up of a partnership. The dismissal was based on the fact that a
material dispute of fact which could not be resolved on the papers had arisen,
and the applicant had failed to satisfy his onus. Hockey AJ had refused to
refer the matter to oral evidence because, in his view, the dispute of fact was
foreseeable prior to the institution of the application proceedings.13
[74] Francis J in upholding the appeal accepted:
“[32] Counsel for the respondent also argued that the appellant ought to
have applied for a referral to oral evidence as soon as a dispute was
evident on the papers and before full argument was heard by the court
below in respect of the application. It is indeed so that an application
for a referral to oral evidence or trial, where warranted, should be
applied for by a litigant as soon as the affidavits have been exchanged
and not after argument on the merits. Whilst this is a salutary rule, it is
by no means an inflexible one. In any event, in the matter at hand, the
appellant raised the issue of a possible material dispute of fact in
reply to the respondent’s answering affidavit . This was the earliest
opportunity to do so because it was only in her answering affidavit
that the respondent for the first time really nailed her colours to the
mast.”
(emphasis added, footnotes omitted)
[75] Binns-Ward J agree d with the upholding of the appeal . He explained his
understanding of a court’s discretion to refer to oral evidence.
[39] It is not altogether clear to me that a court faced with deciding an
appropriate order in terms of rule 6(5)(g) has a choice of the relatively
unfettered nature that characterises well recognised truly discretionary
decisions such as in matters of sentencing, general damages and
costs etc. A court has to have regard to a number of disparate and
13 Repas at para [2]
incommensurable features in coming to an appropriate decision in
terms of rule 6(5)(g): (i) the foreseeability of the dispute, (ii) the degree
of blameworthiness, if any, in the circumstances of the given case of
the applicant having proceeded in the face of a foreseeable dispute,
(iii) the nature and ambit of the dispute in question, (iv) its amenability
to convenient determination by a reference to oral evidence on
defined issues, as distinct from in action proceedings to be
commenced de novo, (v) the probabilities as they appear on the papers
(if those are against the applicant, the court will be less inclined to send
the dispute for oral evidence) (vi) the interests of justice, and (vii) the
effect of any other feature that might be relevant in the circumstances
of the given case.
and
[41] It seems to me, on the face of matters, that the decision that a
court has to make under rule 6(5)(g) involves what EM Grosskkopf JA
referred to in Media Workers Association as ‘a determination ... [to be]
made by the court in the light of all relevant considerations '. The
appropriate decision has to be informed by those considerations.
[76] My approach in considering the referral application was to have regard to all
the relevant considerations. In particular , I had regard to whether referral
would have in the words of Lombaard conduced to “an effective and speedy
resolution of the dispute and the overall application.”
[77] I concluded that referral to oral evidence would not conduce to an effective
and speedy resolution.
[78] My reasons were that t he applicants elected to proceed by way of motion.
That may have been, and probably was, in the circumstances , a reasonable
choice.
[79] They claimed their application was urgent and requested condonation for non-
compliance with the Rules relating to service and time periods.
[80] But inexplicably they did not, as they were entitled to, enrol the matter on any
particular nominated date, truncating the time periods for the filing of papers.14
[81] As it was put in Arvrum (see below) “almost all requirements of urgency can
be managed by using Form 2(a) with shortened time periods , or by mere
adaptation of an aspect of the form, for example advance nomination of a
date for hearing or omitting notice to the Registrar, accompanied by
changed wording when necessary.”
[82] If the applicants were of the view that the matter was urgent , they could and
should have set the application down on a nominated date with a timetable ,
commensurate with that urgency, for the filing of papers and the respondents
would have ignored the applicants’ chosen timetable at their peril. 15 They
could have sought to set the matter down on the urgent roll at the outset.16
[83] And if it is a complex or voluminous application , immediately after launching
the application, the applicants’ attorneys or counsel could address a practice
note to the Acting Judge President. In the practice note a short explanation is
given as to the nature and urgency of the matter and the Acting Judge
President may in her discretion make an early allocation of the Judge to be
seized with the matter.17 The allocated judge then manages the case.
14 The common and generally accepted practice in this Division, unlike other Divisions, is for an
applicant to follow that route.
15 See generally Republikeinse Publikasies (Edms) Bpk v Afrikaanse Pers Publikasies (Edms) Bpk
1972 (1) SA 773 (A), and more recently Magashule v Ramaphosa and Others [2021] 3 All SA 887
(GJ) and Phalatse and Another v Speaker of the City of Johannesburg & Others [2022] ZAGPJHC
1054 (25 October 2022).
16 The Practice Directives of this Division dated 12 September 2023 issued by Acting Judge President
Goliath, and Arvum Exports (Pty) Ltd and Others v Costa NO (18979/2013) [2013] ZAWCHC 176 (20
November 2013) reflect a somewhat different approach. Binns Ward J in Arvum endorsed the
approach of Flemming DJP in Gallagher v Norman's Transport Lines (Pty) Ltd 1992 (3) SA 500 (W).
17 The respondent may still argue that application lacks urgency and should be struck from the roll.
That is the risk an applicant takes in setting the matter down on this “urgent” basis.
[84] This useful practice serves the administration of justice and works well . The
Court’s experience as to this custom and how successfully it operates is well -
known and established in this Division.
[85] When the answering affidavit was served in late February 2024 the applicants
should have been immediately consider ed whether a material bona fide
dispute of fact was raised.
[86] They could have immediately launched an urgent interlocutory referral (Rule
6(5)(g)) application. But they did not.
[87] In their lengthy replying affidavit filed nearly two months after receipt of the
answering affidavit no mention is made of any such dispute. Compare Repas
where the applicant raised the issue of a possible material dispute of fact in
the reply to the respondent’s answering affidavit. In the present case no
mention of a dispute was made in the replying affidavit.
[88] The applicants did not mention the apparent dispute in their heads of
argument. Indeed, they were content to proceed with the application in the
absence of a referral to oral evidence.
[89] The respondents ’ heads of argument elicited no “dispute of fact complaint”
from the applicants.
[90] At literally the eleventh hour the referral application was made on the basis
that senior counsel in final preparation for the hearing advised that a dispute
of fact required referral to oral evidence.
[91] I considered whether oral evidence would result in the effective and speedy
resolution of the application on a conspectus of all relevant considerations.
[92] Could the hearing of oral evidence result in an effective remedy? The hearing
of oral evidence w ould inevitably have resulted in the application only being
finalised in 2025. But for any relief arising from the application to be effective
it would need - on applicants’ version - to be granted (well) before late 2024.
[93] The hearing of oral evidence w ould have rendered any orders that may be
granted ineffective. There were no exceptional circumstances at all t o justify a
referral to oral evidence.
[94] A referral to oral evidence will slow the matter down rather than speed up
resolution of the main application.
[95] And I also took into account as part of the conspectus of all the circumstances
that the answering affidavit allegedly raising the dispute was served at the end
of February 2024, and yet the referral was only launched nearly three months
later on 17 May 2024 at the last possible moment.
[96] Those were my reasons for dismissing the referral application.
The Interim relief sought
[97] It is not in issue the first respondent was paid over R8 164 562.50 (8 million
rand) from April 2019 to the end of September 2023 by the applicants for
consultancy services relating to the secondhand goods, pawn broking and the
micro-lending industries.
[98] Common and business sense dictates that t he applicants would not have
engaged and continued to use the respondents’ services and allowed them to
perform information technology work exposing them to the full spectrum of
confidential information if they did not believe they had the benefit of restraint
and confidentiality agreements in place during this time.
[99] And so, when they believed (from mid - October 2023) that their contractual
rights had been and were being violated they launched the main application in
late December 2023.
[100] After my refusal of the referral application, they sought interim relief. Oddly
the interim relief was not pending finali sation of the main application. It was
pending the outcome of an application for leave to appeal my dismissal of the
referral application.
[101] The applicants seek interim relief in the following terms together with a
punitive costs award;
“Pending the outcome of an application for leave to appeal against the Court’s
order of 17 May 2024 in terms of which the Court dismissed an application for
a referral to oral evidence brought on behalf of the applicants:
1 The first and second respondents are interdicted and restrained from:
1.1 having any involvement in an operation which deals with second
hand goods, pawn broking and the micro -lending industries
directly or indirectly either solely or jointly or as employee,
manager, agent for any person, firm, partnership, joint venture or
body corporate;
1.2 carrying on, assisting or being engaged, concerned or interested
in, either financially or otherwise as director, shareholder or as
consultant or advisor in respect of any business which is similar
to an operation which deals with second hand goods, pawn
broking and the micro-lending industries;
1.3 accepting instructions whether directly or indirectly for purposes
of rendering information technology related services comprising
inter alia the design and development of software systems for
the benefit of any entity, member or person associated therewith
conducting business in the second hand goods, pawn broking
and the micro -lending industries regardless of whether they act
as franchisee or in any like capacity.
2 The first and second respondents are interdicted and restrained
from disclosing whether directly or indirectly any confidential
information:
2.1 acquired from the applicants which shall include but not be
limited to all calculations, strategy documents, spreadsheets,
computer programs, papers, drawings, models, samples and
other materials;
2.2 concerning the business methods, operations, business
relationships, products, commercial, financial, marketing
information and trade secrets of the third applicant.”
[102] I shall refer to the relief sought in paragraph 1 as the restraint relief and that in
paragraph 2 as the confidentiality relief.
[103] It seems to me the respondents should have had no difficulty with being
restrained and interdicted from disclosing “confidential information” as a
matter of principle. And the details of that information which would be covered
included in 2.1 and 2.2 should also be of no moment to them.
[104] How can they complain about being prohibited from disclosing confidential
information acquired from the applicants concerning the business and the
trade secrets of the third applicant?
[105] For information to be confidential and subject to prohibition it must satisfy
three requirements.
The information must be (i) capable of application in trade or industry, that is,
it must be useful and not be public knowledge;
(ii) known only to a restricted number of people or a closed circle;
(iii) of economic value to the person seeking to protect it.18
[106] The question arises as to what information is constituted as part of
confidential information.
[107] The uncontested evidence shows that the first respondent was paid over R8
164 562.50 from April 2019 to the end of September 2023 by the applicants.
[108] The applicants suggest that were an interim interdict to be granted: “No
prejudice will be suffered by the respondents who are free to pursue their
trade, even in the development of point -of-sale software provided they do not
do so with reference to the pawn industry, second hand goods and micro -
lending. Their capacity to trade up and down the wholesale and retail value
chain accordingly remains undisturbed.”
[109] I tend to agree.
[110] They also argue that “As the relief is therefore of shorter duration for present
purposes, the relief is only temporary and not finally decisive of the parties’
rights with the result that a degree of proof less exacting than that required for
the grant of a final interdict will suffice.”
[111] The respondents on the other hand point to the sorry tale of the applicants ’
curious litigation mishaps . And so they argue, inter alia , that the applicants
must show they have prima facie prospects of success in the further
proceedings. They correctly point out that by late 2024 the relief the
applicants seek will probably have become moot, and there are no prospects
of success in their application for leave to appeal my refusal of the referral
application.
18 Townsend Productions (Pty) Ltd v Leech & Others 2001 (4) SA 33 (C) at 53J -54B; Mossgas (Pty)
Ltd v Sasol Technology (Pty) Ltd [1999] 3 All SA 321 (W) at 333F; see also Avis Southern Africa (Pty)
Limited v Porteous and Another 2024 2 SA 386 (GJ) at para 87.
[112] I must be guided by what the Supreme Court of Appeal stated in Fischer and
Another v Ramahlele and Others (203/2014) [2014] ZASCA 88; 2014 (4) SA
614 (SCA); [2014] 3 All SA 395 (SCA) (4 June 2014):
“[13] Turning then to the nature of civil litigation in our adversarial
system it is for the parties, either in the pleadings or affidavits, which
serve the function of both pleadings and evidence, to set out and
define the nature of their dispute and it is for the court to adjudicate
upon those issues. That is so even where the dispute involves an issue
pertaining to the basic human rights guaranteed by our Constitution, for
‘it is impermissible for a party to rely on a constitutional complaint that
was no t pleaded’. There are cases where the parties may expand
those issues by the way in which they conduct the proceedings. There
may also be instances where the court may mero motu raise a
question of law that emerges fully from the evidence and is necessary
for the decision of the case. That is subject to the proviso that no
prejudice will be caused to any party by its being decided. Beyond that
it is for the parties to identify the dispute and for the court to determine
that dispute and that dispute alone.
[14] It is not for the court to raise new issues not traversed in the
pleadings or affidavits, however interesting or important they may seem
to it, and to insist that the parties deal with them. The parties may have
their own reasons for not raising those issues. A court may sometimes
suggest a line of argument or an approach to a case that has not
previously occurred to the parties. However, it is then for the parties to
determine whether they wish to adopt the new point. They may choose
not to do so beca use of its implications for the further conduct of the
proceedings, such as an adjournment or the need to amend pleadings
or call additional evidence. They may feel that their case is sufficiently
strong as it stands to require no supplementation. They may simply
wish the issues already identified to be determined because they are
relevant to future matters and the relationship between the parties.
That is for them to decide and not the court. If they wish to stand by the
issues they have formulated, the court may not raise new ones or
compel them to deal with matters other than those they have
formulated in the pleadings or affidavits.”
[113] Were I to be of the view that on the papers the applicants are entitled to the
main relief or an interim interdict pending the finalization of the main application
that is irrelevant.
I am constrained to consider the interim relief as in fact sought by the
applicants and nothing else.
[114] And the serious and ultimately insurmountable difficult y I have is that the
interim relief sought is pending the application for leave to appeal my dismissal
ruling. It is not sought pending the finalisation of the main application.
[115] The applicants in their well-crafted heads of argument do not point to any
authority where an interdict was granted pending any event other than that
inextricably linked to the substance of the interim interdict , that is the further or
main proceedings. This is perhaps for good reason. A court considering interim
relief will inv ariably take into account the prospects of success in the main
case.19 If the prospects are strong, a court will be more likely to grant the
interim relief. Where it is weak, a court will be less likely to do so. 20 The main
case is crucial to how the court hearing the interim relief balances the
competing considerations.
[116] Interim interdicts are usually and almost always sought and granted pending an
action or a constitutional challenge or review or other application. But not in
relation to an interlocutory to a main application. Surely the interdict in casu
could and should have been pending the main application.
19 Economic Freedom Fighters v Gordhan and Others 2020 (6) SA 325 (CC) at para [42] where the
Constitutional Court held “ Before a court may grant an interim interdict, it must be satisfied that the
applicant for an interdict has good prospects of success in the main review”.
20 Olympic Passenger Services v Ramlagan 1957 (2) SA 382 (D) at 383E-F.
But it is not, and as Fischer 21 requires, it is not for me to raise and compel the
parties to argue and seek relief they have not chosen, for whatever reason .
That would be inappropriate and wrong. As it was put by the SCA this calls for
judicial restraint on my part.
[117] This approach does not elevate form over substance. It gives effect to fairness
in litigation between the parties, which is an essential component of the right to
have disputes determined through the application of law. The respondents were
called upon to meet a case concerning an interim interdict pending an
application for leave to appeal. They were not called upon to meet a case for an
interim interdict pending the main proceedings. A court is not entitled to
refashion the relief sought by the applicants because it would be unfair to do so
in an adversarial system such as ours.22
[118] The applicants in their heads in the application for interim relief suggest the
prima facie right asserted is the contractual right. They say: “The applicants
have therefore established the existence of a prima facie right rooted in
contract that entitles them to relief. “
[119] But the problem is the interdict is sought pending the application for leave to
appeal the dismissal ruling. And the leave to appeal application has not yet
been filed because I have not delivered my reasons in the referral application.
[120] The future possibilities the route chosen by the applicants are endless in
number. Were I to grant leave to appeal then what would happen next ? A
relatively long appeal process would ensue. If the appeal succeed s then all
that would happen would be for the application to be referred back to this
Court for the hearing of oral evidence and the merits? How long would that
process take? At least a year or more. And what would happen to the interim
interdict? It would have come to an end when I granted leave to appeal, with
the possibility of an application for an extension. And that would clearly result
21 At para [15].
22 National Commissioner of Police and Another v Gun Owners of South Africa 2020 (6) SA 69 (SCA)
at para [25 – 27].
in the granting of final relief without the merits being decided. That cannot be
right.
If I were to refuse leave to appeal what would happen? The interdict would
come to an end and there could be an application for its extension pending a
petition to the SCA.
[121] The mind boggles at the various weird and wonderful permutations that could
arise.
[122] But that is because of how the applicants in exercising their rights have
chosen to litigate and the strategic different routes they adopted.
[123] The applicants have not shown they have a prima facie right in respect of their
application for leave to appeal and they are not entitled to an interim interdict.
Concluding remarks
[124] I am by no means convinced that the applicants have not made out a case for
the restraint and confidentiality relief in the main application. But I cannot and
do not make any finding on that issue – it is not before me.
[125] I am constrained to decide the case on the papers, and particularly the relief
as sought. The applicants have not moved for final relief before me, and I am
not persuaded that the alternative relief couched in the manner it has been
should be granted.
[126] In the circumstances the application for interim relief pending the application
for leave to appeal my dismissal of the referral application is dismissed with
costs of two counsel on the C Scale.
ANTON KATZ AJ
Counsel for the applicants: L Kuschke SC
CC Bester
Counsel for the respondents: A R Sholto Douglas SC
R Patrick SC