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[2012] ZALCJHB 49
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Staar Surgical (Pty) Ltd v Lodder (J1333/12) [2012] ZALCJHB 49 (13 June 2012)
REPUBLIC OF
SOUTHAFRICA
THE LABOUR COURT OF
SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Reportable
Case No: J1333/12
In the matter between:
Staar Surgical (Pty)
Ltd
…..........................................................................
Applicant
and
Julia Lodder
…........................................................................................
Respondent
Heard: 7 June 2012
Decided: 13 June 2012
Summary: Practice and
Procedure – Authority to litigate and urgency
___________________________________________________________________
JUDGMENT
___________________________________________________________________
GAIBIE AJ:
Introduction
[1] The applicant
launched an application seeking a rule nisi with interim relief on an
urgent basis. The application was precipitated
by the applicant’s
contention that the respondent, an erstwhile employee of the
applicant, is acting contrary to a restraint
of trade agreement (‘the
restraint agreement’) entered into between the parties.
[2] A rule nisi was
accordingly sought, inter alia, on the following basis:
‘
The
respondent is interdicted for a period of 12 (twelve) months,
calculated from 1 May 2012, from soliciting, interfering with
or
enticing or endeavouring to entice away from the applicant –
any person, firm, principal, undertaking or company, who
or which
during the period of 2 (two) years prior to 1 May 2012, is or was
accustomed to dealing with the applicant’.
[3] The respondent
opposes the application and raises two challenges: the first
challenge is in relation to the authority of the
deponent to the
founding affidavit (‘Le Roux’), and the second challenge
is that of ‘urgency’.
[4] Both of these
challenges are dealt with below.
Challenge to the
deponent’s authority
The relevant aversions
relating to the deponent’s authority
[5] Le Roux, a director
of the applicant, averred in the founding affidavit that he was ‘duly
authorized to depose to this
affidavit on behalf of the applicant’.
In the answering affidavit, the respondent challenged his authority
to do so in the
following terms:
‘
It is denied
that Le Roux is duly authorised to depose to this affidavit as no
resolution to that effect has been attached to the
founding
affidavit.’
[6] This attack prompted
a sedate reply. In it, Le Roux simply confirmed once again that he
was duly authorised to attest to the
replying affidavit on behalf of
the applicant and stated that ‘a resolution will be made
available if necessary to confirm
[his] authority in this matter’.
It was common cause that the resolution was not made available either
prior to or at the
date of the hearing of this matter.
[7] The respondent’s
counsel, Mr Riaan Venter, relying on the authority of
Tattersall
and Another v Nedcor Bank Ltd
,
1
contended that in the
absence of appropriate objective proof of Le Roux’s authority
to institute these proceedings, the proceedings
are a nullity and the
application must, in consequence thereof be dismissed.
[8] Mr Rudolph Kuhn (‘Mr
Kuhn’), on behalf of the applicant, essentially raised two
arguments in opposition to the challenge
on Le Roux’s
authority. In the first place, he argued that whilst the respondent
challenged the authority of the deponent,
she did not challenge his
status as a director, and by implication she had conceded to his
authority to launch these proceedings.
Secondly, he contended in
broad and general terms that there were sufficient averments in the
founding papers to establish Le Roux’s
authority to act on
behalf of the applicant in this matter. Mr Kuhn did not however point
to anything specific in the founding
affidavit in this regard.
[9] It is my view, that
the respondent’s challenge to Le Roux’s authority is
misplaced, and the applicant’s response
thereto is
inappropriate for the reasons indicated below.
The nature of the
challenge
[10] The respondent’s
challenge is directed to Le Roux’s authority to depose to the
founding affidavit. She denied that
‘Le Roux is duly authorised
to depose to this affidavit as no resolution to that effect has been
attached to the founding
affidavit’. The challenge is in
respect of his authority to depose to the affidavit and not to the
institution of these proceedings.
[11] In
Ganes
and Another v Telecom Namibia Ltd
,
2
Streicher JA in similar
circumstances stated that:
‘
In my view,
it is irrelevant whether Hanke had been authorised to depose to the
founding affidavit. The deponent to an affidavit
in motion
proceedings need not be authorised by the party concerned to depose
to the affidavit. It is the institution of the proceedings
and the
prosecution thereof which must be authorised. In the present case the
proceedings were instituted and prosecuted by a firm
of attorneys
purporting to act on behalf of the respondent. In an affidavit filed
together with the notice of motion a Mr Kurz
stated that he was a
director in the firm of attorneys acting on behalf of the respondent
and that such firm of attorneys was duly
appointed to represent the
respondent. That statement has not been challenged... It must,
therefore be accepted that the institution
of proceedings was duly
authorised. In any event, Rule 7 provides a procedure to be followed
by a respondent who wishes to challenge
the authority of an attorney
who instituted motion proceedings on behalf of an applicant. The
appellants did not avail themselves
of the procedure so provided.’
[12] In these
proceedings, Le Roux indicated in his founding affidavit that the
other directors had deliberated on the appropriate
course of action
to take in light of the respondent’s conduct. In consequence of
those deliberations, Le Roux stated that
the ‘applicant’
took advice from their current attorneys of record, and a letter
dated 16 May 2012 was sent to the
respondent’s attorneys
threatening urgent proceedings in the event that she did not comply
with the terms of the restraint
agreement. Le Roux also referred to
numerous other correspondences that were sent and received by the
applicant’s attorneys
in this matter, including a letter dated
24 May 2012 in which the respondent’s attorneys were informed
that the applicant
intended to ‘proceed with an urgent
application against your client in order to interdict her from
interfering with our client’s
business and from causing harm to
its business’.
[13] In addition to these
averments, an affidavit was filed by the applicant’s attorney,
Mr Kuhn, in which he stated that
he was a practising attorney and
that he was the applicant’s attorney in this matter. He also
confirmed the averments made
by Le Roux in his founding affidavit. In
the circumstances, it was Mr Kuhn who instituted motion proceedings
on behalf of the applicant,
and it was his authority to do so that
was not challenged by the respondent.
[14] It is my view that
the principle established in
Gane
s
,
that such challenges to
authority in general must be processed through the mechanism of Rule
7 of the Uniform Rules of Court is
correct, and constitutes a
salutary approach to matters of this nature. In
Unlawful
Occupiers, School Site v City of Johannesburg
,
3
Brand JA cited the dicta
in
Eskom
v Soweto City Council
1992
(2) SA 703
(W) and
Ganes
with
approval including the
ratio
decidendi
for
such an approach which appears at 705D-G of the
Eskom
judgment (
supra
):
‘
The care
displayed in the past about proof of authority was rational. It was
inspired by the fear that a person may deny that he
was party to
litigation carried on in his name. His signature to the process, or
when that does not eventuate, formal proof of
authority would avoid
undue risk to the opposite party, to the administration of justice
and sometimes even to his own attorney....
The developed view, adopted in Rule
7(1), is that the risk is adequately managed on a different level. If
the attorney is authorised
to bring the application on behalf of the
applicant, the application is necessarily that of the applicant.
There is no need that
any other person, whether he be a witness or
someone who becomes involved especially in the context of authority,
should additionally
be authorised. It is therefore sufficient to know
whether or not the attorney acts with authority.’
[15] In referring to the
judgement of Fleming DJP in
Eskom,
Brand
JA in
Unlawful
Occupiers
held
that a party who wishes to raise the issue of authority in motion
proceedings, as well as in action proceedings, should use
the Rule 7
procedure, and should not do so ‘by way of argument based on no
more than a textual analysis of the words used
by a deponent in an
attempt to prove his authority’.
4
[16] In light of the
above jurisprudence, the dictum in
Tattersall
is not
applicable to the facts of this matter, and has in any event been
replaced by the
dicta
in
Eskom
,
Ganes
and
Unlawful
Occupiers
.
[17] Whilst there is no
such corresponding Rule 7 (of the Uniform Rules of Court) in the
Rules of the Labour Court, this Court may
in such circumstances and
in terms of Rule 11(3) ‘adopt any procedure that it deems
appropriate in the circumstances’.
It seems to me that this
would be an appropriate rule to adopt in circumstances where the
issue of authority is raised
5
.
[18] This challenge must,
for the reasons indicated above, fail.
Urgency
[19] It is my view that
the major hurdle that the applicant fails to surmount is that of
urgency. It is trite that an applicant
instituting an urgent
application must justify the necessity to circumvent the ordinary
time periods set out in the rules of this
Court. The question in
every application brought as a matter of urgency is whether the
application is urgent. In this regard, Van
Niekerk J in
Jiba
v Minister: Department of Justice and Constitutional Development
,
6
stated that
–
‘
Rule 8 of
the rules of this court requires a party seeking urgent relief to set
out the reasons for urgency, and why urgent relief
is necessary. It
is trite that there are degrees of urgency, and the degree to which
the ordinary applicable rules should be relaxed
is dependent on the
degree of urgency. It is equally trite that an applicant is not
entitled to rely on urgency that is self created
when seeking a
deviation from the rules.’
[20] Whether or not an
application is urgent will of course depend on the relevant factual
circumstances in each matter. I accordingly
turn to an assessment of
the facts of this matter.
[21] In the applicant’s
founding affidavit, the deponent deals specifically with the issue of
‘urgency’. Under
the heading of ‘urgency’ the
deponent contended that the applicant is entitled to urgent interim
relief because it
has satisfied the other requirements for such
relief including a
prima facie
right, the apprehension of
irreparable harm, the balance of convenience and the absence of
satisfactory alternative remedies. This
approach is clearly incorrect
precisely because the applicant must, on the basis of a factual
scenario, indicate the circumstances
which give rise to urgent relief
as opposed to relief in the normal course.
[22] In order to
contextualise the relevant sequence of events in this matter, it is
necessary to record some of the relevant background
facts. According
to Le Roux, the applicant is a company that supplies opthalmological
products (‘the products’) to
relevant medical practices
in South Africa (‘the applicant’s clients’). In
order to do so, it purchased these
products from international
suppliers including entities known as i-Medical, Rumex International
Co and Staar Surgical (Switzerland).
[23] The respondent was
employed as the business unit manager and she was responsible for the
sales of these products in South Africa.
In particular, she was
required to market i-Medical’s products to the applicant’s
clients. She earned a monthly salary
of R- and her employment
relationship was governed by an employment contract and the restraint
agreement.
[24] For the purposes of
this application, the applicant seeks to enforce clause 12 of the
restraint agreement. That clause provides
as follows:
‘
Employee
and clients
12 The Employee further undertakes, in
favour of the Company and in addition to and without limiting any
other undertakings given
by him / her in this Agreement, that for a
period of 12 (twelve) months after termination of his services / her
services, for whatever
reason:
12.1 he/she will not solicit,
interfere with or entice or endeavour to entice away from the
Company, any person, firm, principal,
undertaking or company, who or
which during the period of 2 (two) years immediately prior to the
said termination of his / her
service with the Company, is or was a
client of, or was accustomed to dealing with the Company;
12.2 he/she will not solicit,
interfere with or entice or endeavour to entice away from the
Company, any Employee of the Company.’
[25] The applicant
contended that this clause, although entitled ‘employee and
clients’, entitled it to seek an urgent
interim order
interdicting the respondent from having any dealings with its
‘suppliers’ of its products, in addition
to its
‘clients’.
[26] The sequence of
events is this matter commenced on the date of the respondent’s
resignation from employment. On 29 March
2012, the respondent
informed the directors of the applicant that she would be resigning,
on one month’s notice, with effect
from 30 April 2012.
[27] On 5 April 2012, the
respondent notified the applicant’s five major suppliers of the
products, of her resignation. These
notifications were copied to two
directors of the applicant, one of which was Le Roux.
[28] On 30 April 2012, Le
Roux received a letter from Ms Schroeter of i-Medical in which she
informed him that she was out of the
country and that she was shocked
about the respondent’s resignation. The further contents of her
letter reads:
‘
No notice or
sign from STAAR Surgical / VIKING Medical, I was wondering who will
take care of i-Medical Opthalmological Product’s
now?
Michelle in Capetown, Nirvana in
Johannesburg, Lethizia in Bloemfontein, Tracy in Durban and Julia in
Johannesburg and Pretoria.
All with very good skills both on
Product and contact with Surgeons in their territory, all have left
STAAR Surgical / Viking Medical.
Situation is very unsatisfactory, so I
had to make a decision.
As there is no one with enough
knowledge on both product and client, I came to the following
conclusion.
i-Medical withdraws its product line
with a 2 weeks notice ending on 11 May 2012.’
[29] It was upon receipt
of this letter that Le Roux indicated that he had become ‘suspicious’
of i-Medical’s
sudden termination of the business relationship,
the withdrawal of their product line and indeed the timing of these
events. He
conducted an informal investigation, and noticed from her
cellular phone records that she had: a) sent 16 sms messages to
i-Medical
in February 2012; b) sent a further 11 sms messages in
March 2012; and c) she had made five calls to i-Medical on 16, 22,
23, 27
and 29 March 2012. Based on this information and the fact that
Ms Schroeter had avoided contact with the directors of the applicant
and that she did not take or return their calls–
‘
it had
become apparent that the respondent had had discussions with Ms
Schroeter and that she had persuaded Ms Schroeter to terminate
i-Medical’s relationship with applicant and to withdraw its
product line from the applicant.’
[30] Despite this
conclusion, Le Roux indicated that the directors had simply
deliberated on the appropriate course of action to
take in light of
this turn of events.
[31] On 10 May 2012, Le
Roux indicated that the applicant had became aware that the
respondent had interfered with one of their
clients, Cape Eye
Hospital in Cape Town, in that she had instructed Cape Eye to remove
all the applicant’s stock from their
shelves. Whilst there is a
dispute of fact in relation to this incident, it is the applicant’s
version on this matter, particularly
the timing of that information,
that is determinative as to whether it had acted with the necessary
urgency to protect its interests.
[32] In any event, on 16
May 2012, more than 2 weeks after receipt of the letter from
i-Medical, and in circumstances where the
applicant had decided not
to take any action, it received a letter from Leistner Attorneys who
informed them that they represented
both i-Medical and the
respondent, and they requested the applicant to return all i-Medical
stock at cost price.
[33] Upon receipt of this
letter, the applicant took advice from its attorney, Mr Kuhn. On 16
May 2012, he wrote to Leistner Attorneys
on behalf of the applicant.
He responded to the issue of i-Medical stock, recorded the incident
that occurred on 10 May 2012 at
the Cape Eye Hospital, and confirmed
that the respondent’s conduct which resulted in the termination
of i-Medical’s
relationship with the applicant constituted a
contravention of her employment agreement and the restraint
agreement. In the circumstances,
he informed Leistner attorneys that
–
‘
.... we
demand that Ms Lodder (the respondent) immediately desists from
interfering with our client’s proprietary rights.
To this end,
we demand that she issues a written undertaking to us that she will
not solicit, entice or interfere with any of our
client’s
customers, principals or employees. Should we not receive such an
undertaking by 16:00 on Friday 18 May 2012, we
shall have no
alternative but to approach the Johannesburg Labour Court for an
urgent interdict to restrain her from contravening
the restraints. We
trust that this will not be necessary.
We look forward to hearing from you by
16:00 on Friday 18 May 2012.’
[34] On 18 May 2012, no
such undertaking was given. Instead, Leistner Attorneys requested and
obtained a copy of the respondent’s
contract of employment on
the same day.
[35] On the same day, or
at some stage between the period of 18 and 23 May 2012, the applicant
became aware of e-mail communication
between the regional sales
manager of Rumex International Co, a supplier of products to the
applicant, and the respondent (‘the
Rumex e-mail’). The
details of this e-mail will be dealt with in para 38 below.
[36] On 23 May 2012,
approximately five days after the undertaking sought in para 33 above
was not received, Mr Kuhn wrote further
letters to Leistner Attorneys
and repeated in broad terms the offensive nature of the respondent’s
conduct. He also demanded
that the respondent agree to and sign an
undertaking - which he despatched under separate cover to Leistner
Attorneys - by close
of business on 24 May 2012.
[37] Once again, the
respondent did not comply with the undertaking sought by the
applicant. Later that day, Mr Kuhn informed Leistner
Attorneys that
the applicant had no option but to interdict her from interfering
with and from causing harm to its business. In
particular, and with
reference to the Rumex e-mail, he stated that:
‘
Our client
understands that Ms Lodder has now approached another of our client’s
principals in order to entice them to do
business with her. She is
therefore acting with impunity in contravening her restraints.’
[38] As indicated
earlier, the Rumex e-mail was sent by its regional sales manager to
the respondent. The content thereof reads
as follows:
‘
Hi Julia
How are you going?
I spoke to my boss and she told me
that we can collaborate with you as well. We have no any contracts
with Viking that’s why
we can offer you the same conditions –
30%+5%
Please talk to your new directors
about that, we’d be happy to continue working with you....’
[39] Whilst it is unclear
on what basis this e-mail constituted evidence, if any, of the
respondent’s breach or contravention
of the restraint
agreement, it is certainly clear from the averments made in the
founding affidavit that Le Roux was of the view
that the Rumex e-mail
demonstrated that her conduct was in direct violation of the
restraint agreement. At this stage, the applicant
had, on its own
version experienced three significant events which were in its view,
in direct violation of the restraint agreement:
the termination of
the i-Medical relationship on 30 April 2012, the Cape Eye Hospital
incident on 10 May 2012 and the Rumex issue
on or around the 18
th
of May 2012.
[40] It is apparent that
the first major event in the chronology set out above, occurred on 30
April 2012 when the applicant concluded
that the respondent had
interfered with and was responsible for the termination of its
relationship with i-Medical. Whilst the
applicant deliberated about
the matter, it did nothing until it received a letter from Leistner
Attorneys on 16 May 2012. On that
day, it acted decisively but failed
to carry out its threat of urgent proceedings when the respondent had
not complied with its
demand by 18 May 2012. The applicant attempted
again to place the respondent on terms on 23 May 2012, and in the
absence of any
compliance with such terms, it again threatened urgent
proceedings in the Labour Court.
[41] The ‘urgent’
application was eventually served on the respondent on 30 May 2012,
which is: one month after the
i-Medical incident; twenty days after
the Cape Eye Hospital incident; two weeks after the initial
undertaking was sought and the
threat of urgent proceedings in the
Labour Court was made on 16 May 2012; and seven days after the second
undertaking was sought
on 23 May 2012. Moreover, the application was
set down for hearing on 7 June 2012, eight days after the application
was launched.
[42] The applicant
averred in its replying papers that yet another event occurred on 1
June 2012 when one more of its suppliers,
Staar Surgical, a Swiss
company, also terminated its relationship with the applicant. The
applicant did not however aver that the
respondent was responsible
for this incident although it suggested it implicitly by way of
inference.
[43] It seems to me that
when the applicant’s explanation for the sombre, casual,
leisurely and lackadaisical manner in which
this application was
launched is reduced to its essentials, it is that the parties were
corresponding with each other and that
the respondent’s
attorneys did not do what they were supposed to do, such as provide
timeous responses to written communications
or produce an appropriate
undertaking from their client, the respondent. This approach to
urgent applications is clearly inappropriate
and insufficient.
[44] Where an applicant
avers the contravention of a restraint agreement or the interference
with its proprietary rights that have
a resounding effect on its
business activities, such an applicant must take appropriate,
expedient, decisive and urgent steps to
protect its interests. Given
the pace at which significant events in this matter were dealt with,
I fail to appreciate how in these
circumstances the matter assumes
any degree of urgency. The application fails on this ground alone.
Other grounds for
interim relief
[45] Aside from my view
on urgency, I would not have been inclined to grant the relief sought
on the merits. I will provide brief
reasons for my view in this
regard.
[46] In order to obtain
the relief sought, the applicant has to fulfil the requirements for
interim relief, i.e. a prima facie right;
the absence of an adequate
alternative remedy; the apprehension of irreparable harm; and an
indication that the balance of convenience
favours it.
Prima facie right
[47] The applicant
annexed a copy of the employee’s contract of employment to its
founding papers. The contract does not itself
indicate the employee’s
job description but refers to an annexure ‘B’ which
apparently does. That annexure was
not attached. However, it appears
from Le Roux’s affidavit that the applicant purchased the
products from its suppliers and
that the respondent was responsible
for marketing such products to its clients. She was, according to Le
Roux, ‘in charge
of sales for the whole of the Republic’.
There is no averment that she was responsible for the sourcing or
purchasing of
such products from the suppliers.
[48] The applicant seeks
in effect, and on the strength of clause 12 of the restraint
agreement to interdict her from ‘soliciting,
interfering with
or enticing or endeavouring to entice away from the applicant’,
its suppliers of the products. It does so
apparently on the basis
that clause 12 restrains her from having any such dealings with its
clients and any other entity who ‘was
accustomed to dealing
with the applicant’. As indicated earlier, clause 12 is
entitled ‘employee and clients’,
and it appears from a
plain reading of that clause that it was intended to prohibit the
respondent from having any dealings with
its clients and employees.
[49] This Court has on
previous occasions dealt comprehensively with the requirements for a
valid and enforceable restraint agreement
7
,
and I do not intend to restate the relevant principles except to
confirm that I agree with the judgements of Steenkamp J in those
matters. Prior to any application of such principles it is necessary
in the first instance to give meaning to the precise terms
of the
restraint agreement. Mr Kuhn contended that the words, ‘was
accustomed to dealing with’ the applicant, in clause
12.1 was
wide enough to include its suppliers of products, and that the use of
the term ‘principal’ in that clause
was a reference to
suppliers. Mr Venter submitted, and I agree with his submission, that
the applicant would be ‘accustomed’
to dealing with a
wide range of entities including cleaning and courier companies, and
that it could not have been the intention
of that clause to prohibit
the respondent’s dealing with such entities. To that extent the
clause was both wide and vague.
In addition, the term ‘principal’
was not defined in the agreement.
[50] At an interpretive
level, clause 12 does not support the applicant’s claim to a
prima facie right.
[51] There is no reason
why, in the context of this matter, costs should not follow the
result.
[52] I accordingly make
the following order:
1. The application for
urgent interim relief is dismissed with costs.
___________________
Gaibie, AJ
Acting Judge of the
Labour Court
Appearances:
For the Applicant:
Rudolph Kuhn of Rudolph Kuhn Attorney
For the Respondent: Adv
Riaan Venter
Instructed by: Leistner
Attorneys
1
[1995] ZASCA 30
;
1995
(3) SA 222
(A).
2
2004
(3) SA 615
(SCA) at para 19.
3
2005
(4) SA 199
(SCA) at para 14.
4
Id
at para 16.
5
See
in this regard: CEPPWAWU and others v Express Payroll CC
[2011] 11
BLLR 1061
(LC)
6
(2010)
31 ILJ 112 (LC) at para 18.
7
See
Esquire System Technology (Pty) Ltd t/a Esquire Technologies v
Cronje and another (2011) 32 ILJ 601 (LC); and Continuous Oxygen
Suppliers (Pty) Ltd t/a Vital Aire v Meintjies and another (2012) 33
ILJ 629 (LC).