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[2016] ZALCJHB 70
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Fidelity Security Services (Pty) Ltd v Naidoo and Another (J1837/2015) [2016] ZALCJHB 70 (3 February 2016)
Not
reportable
THE LABOUR COURT OF
SOUTH AFRICA, JOHANNESBURG
JUDGMENT
C
ase
no: J 1837/2015
In
the matter between:
FIDELITY
SECURITY SERVICES (PTY) LTD
APPLICANT
and
KUBENTHRAN
NAIDOO
FIRST RESPONDENT
SECURITAS
TECHNOLOGY (PTY) LTD
SECOND RESPONDENT
Heard
:
1 February 2016
Judgment
delivered: 3 February 2016
JUDGMENT
VAN
NIEKERK J
[1]
There are two applications before the court. The first is an
application for leave to appeal against a part of the judgment
delivered by this court on 16 November 2015, when the court upheld a
restraint agreement concluded between the applicant and the
first
respondent. In terms of the order granted, amongst other things, the
first respondent was interdicted from being interested
in a
competitor business until 31 July 2016, within a radius of 100
kilometres from the applicant’s office in Helderkruin,
Gauteng.
Also before the court is an application for an order that the
operation and execution of the judgment shall not be suspended
pending the application for leave to appeal and if leave is refused,
pending any further petition or application for leave to appeal.
For
convenience, I refer to the parties as they are cited in the main
application.
[2]
The material facts are recorded in the judgment that is the subject
of the present application. It is sufficient to record for
present
purposes that the first respondent was found to be in breach of the
restraint undertaking, by virtue particularly of his
seeking
employment with and employment by the second respondent, a direct
competitor of the applicant. As I have indicated, the
order granted
interdicts and restrains the first respondent from being employed by
any of the applicant’s competitors within
a radius of 100
kilometres from the applicant’s offices, until the expiry of
the 12 month restraint on 31 July 2016.
[3]
I deal first with the application for leave to appeal. The test to be
applied in an application such as the present is that
referred to in
s 17
of the
Superior Courts Act, 10 of 2013
.
Section 17(1)
provides:
Leave
to appeal may only be given where the judge or judges concerned are
of the opinion that –
(a)
(i) the appeal would have a
reasonable prospect of success; or
(ii)
there is some other compelling reason why the appeal should be heard,
including conflicting judgements on the matter under
consideration;
(b)
the decision sought on appeal does not fall within the ambit of
section 16
(2) (a); and
(c)
where the decision sought to be appealed does not dispose of all the
issues in the
case, the appeal would lead to a just and prompt
resolution of the real issues between the parties.
[4]
The traditional formulation of the test that is applicable in an
application such as the present requires the court to determine
whether there is a reasonable prospect that another court may come to
a different conclusion to that reached in the judgment that
is sought
to be taken on appeal. This is not a test to be applied lightly –
the Labour Appeal Court has recently had occasion
to observe that
this court ought to be cautious when leave to appeal is granted, as
should the Labour Appeal Court when petitions
are granted. The
statutory imperative of the expeditious resolution of labour disputes
necessarily requires that appeals be limited
to those matters in
which there is a reasonable prospect that the factual matrix could
receive a different treatment or where there
is some legitimate
dispute on the law (See the judgment by Davis JA in
Martin &
East (Pty) Ltd v NUM
(2014) 35
ILJ
2399 (LAC), and also
Kruger v S
2014
(1) SACR 369
(SCA) and the ruling by Steenkamp
J in
Oasys Innovations (Pty) Ltd v Henning & another
(C
536/15, 6 November 2015).
[5]
There is nothing in the application for leave to appeal that
persuades me that the first respondent has any prospects of success.
[6]
Turning next to the application for leave to execute the judgment and
order pending appeal. This court is a superior court,
and subject to
the Superior Courts Act, 10 of 2013. Section 18 of that Act regulates
the circumstances under which a party may
apply for an order that
departs from the ordinary consequence of filing an application for
leave to appeal, i.e. that the operation
and execution of the
judgment and order appealed against is suspended. The approach
established by s 18 requires an applicant in
an application for leave
to execute to show that the facts and circumstances of the particular
application are exceptional and
warrant a deviation from the normal
rule. This has been referred to as a ‘threshold factual test’
(see
Incubeta Holdings (Pty) Ltd and another v Ellis and another
2014 (3) SA 189
(GJ)) and requires the applicant to show that the
facts and circumstances of its particular case are uncommon, unusual
and\or out
of the ordinary to the extent that a departure from the
ordinary rule that an appeal suspends the operation of the judgement
in
order appealed against should not apply. Further, the applicant is
required to prove on a balance of probabilities that it will
suffer
irreparable harm should the order for leave to execute not be granted
pending the appeal. Finally, the applicant must prove
on a balance of
probabilities that the respondent in the application for leave to
execute will not suffer irreparable harm if leave
to execute is
granted pending appeal. (See
Incubeta Holdings
(supra); and
the unreported judgment by Murphy J in
Coetzer and ERB
Technologies v Actom (Pty) Ltd
, A 269/2015).
[7]
In so far as the requirement of exceptional circumstances is
concerned, the courts have in applications for leave to execute
on an
interdict enforcing a restraint of trade agreement given considerable
weight to the fact that if the order was not put into
operation, the
relief would be forfeited by the applicant because of the short
duration of the restraint which would inevitably
expire before
exhaustion of the appeal process. The present matter is no different.
The restraint has some six months to run. The
limited duration of the
balance of the restraint period and the prospect of the order granted
on 16 November 2015 being rendered
nugatory, and the enforcement of
the restraint undertakings futile, are sufficient to constitute
exceptional circumstances for
the purposes of s 18.
[8]
Turning next to the irreparable harm that the applicant contends it
will suffer, I am satisfied that the applicant has no alternative
way
of protecting itself and its proprietary interests against the
competition with the subject of the restraint agreement. The
harm
that the applicant will suffer if leave to execute is not granted is
self-evident, since if leave to execute is refused, the
first
respondent’s contractual undertakings and the interdict granted
by the court will be worthless. The prospect of any
reparation of
harm by way of damages is remote. Damages would be difficult to
quantify and prove in an instance where what is sought
to be
protected is an investment in customer relationships and the value of
each contract the applicant concludes with its customers.
As the
court in
ERB Technologies
observed, in restraint cases,
damages are not an appropriate alternative remedy precisely because
the relief sought aims to compensate
for the ineffectiveness of that
remedy (see paragraph 20 of the judgment).
[9]
Finally, there is the issue of whether the first respondent would
suffer irreparable harm if leave to execute were granted.
The first
respondent world be denied the opportunity to be in an employment
relationship in breach of the restraint, for the duration
of the
restraint period. While it is his working life of some 23 years being
engaged in the security industry, it is clear from
the papers that
the applicant has not solely being engaged in new business
development. It is not unreasonable to conclude that
the first
respondent is in a position to find employment, for example, with
suppliers of security equipment, in a capacity that
does not bring
him within the ambit of the restraint. I must also take into account
the fact that the first respondent elected
to resign from his
employment with the applicant and to join the applicant’s
direct competitor, despite warning not to do
so. I must also take
into account the limited geographic component of the restraint, which
serves to permit the first respondent
to compete with the applicant
outside of a 100km radius. The fact that the first respondent is not
entitled to engage in his preferred
employment does not constitute
irreparable prejudice. On the other hand, as I have indicated, for as
long as the first respondent
remains employed with the second
respondent in breach of the restraint agreement, the applicant’s
legitimate protectable
interests which it is shown to exist and has
no other means to protect, would continue to be eroded and
prejudiced.
[11]
For the above reasons, I am satisfied that the applicant has made out
a proper case for an order for leave to execute.
[12]
Finally, there is no reason why the first respondent ought not to pay
the costs of both the application for leave to appeal
and the
application to execute.
I
make the following orders:
1.
Leave to appeal against the judgment delivered by
this court on 16 November 2015 is refused.
2.
The operation and execution of the order granted
on 16 November 2015 shall not be suspended pending any petition for
leave to appeal
or application for leave to appeal that might be
filed consequent on any successful petition.
3.
The first respondent (the applicant in the
application for leave to appeal) is to pay the costs of the
application for leave to
appeal, in addition to the costs of the
application for an order to execute the judgment delivered on 16
November 2015.
ANDRÉ VAN NIEKERK
JUDGE
OF THE LABOUR COURT
APPEARANCES
For
the Applicant: Adv. A. Botha instructed by Blake Bester, De Wet &
Jordaan
For
the Respondent: Mr. J. Kotze of Johan Kotze Attorneys