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[2017] ZALCJHB 142
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DCL Food Distributors CC v Coetzee and Others (J1066/16) [2017] ZALCJHB 142 (3 May 2017)
Not
reportable
THE
LABOUR COURT OF SOUTH AFRICA,
HELD
AT JOHANNESBURG
Case No: J 1066/16
In the
matter between:
DCL FOOD DISTRIBUTORS CC
Applicant
and
JEAN HENDRICK COETZEE
First Respondent
RAYMOND FRIEDMAN
Second Respondent
GENERAL SUPPLY CC
Third Respondent
RITA DA SILVA
Fourth Respondent
Heard
:
28 April 2017
Delivered
:
3 May 2017
Summary:
(Contempt proceedings – third party not party to settlement
agreement made an order of court –
no order made against third
party – no court order breached -costs)
JUDGMENT
LAGRANGE
J
Background
[1] This
is an application to hold a third party in contempt of an order made
arising from restraint of trade proceedings. Oddly,
the question of
holding the principal member or members of the third respondent in
contempt does not arise in these proceedings
as they were not
personally cited.
[2] The
first, second and fourth respondents (‘the individual
respondents’) had been employees of the applicant and
after
leaving the applicant, had taken up employment with the third
respondent, a competitor of the applicant.
[3] The
applicant had initiated proceedings to enforce a restraint of trade
agreements against the individual respondents. The third
respondent
was cited as a respondent in the matter but no specific relief was
sought against it. The third respondent did not oppose
the
application and agreed “to abide by the decision of the court
in respect of the Applicant’s application”.
[4] On 10
June 2016, separate settlement agreements were concluded between the
applicant and the individual respondents which were
made an order of
court. In terms of the settlement agreement, the individual
respondents were restrained from enticing any of the
applicants
customers away from it and to make use of any of the applicants
confidential information whether for their own benefit
or for the
third respondent’s benefit. They were also restraint from
making use of any of the applicant’s trade connections
in
relation to any other business deriving any profits from the
applicant’s confidential information. However, none of the
settlement agreements required the individual respondents to leave
the employment of the third respondent. Further, the third respondent
was not a party to any of the settlement agreements, which were made
orders of court.
[5] The
third respondent claims that once the settlement agreements were made
an order of court, it instructed the individual respondents
not to
pursue any of the applicant’s customers referred to in the
settlement agreements. Consequently, the individual respondents
could
not be acting in breach of the settlement agreements. In any event,
the first and second respondents had left the employment
of the third
respondent by the end of July and September respectively. The fourth
respondent regrettably passed away.
[6] In
affidavits filed by the first and second respondents in the contempt
application, they confirmed that they were told by the
third
respondent not to personally call upon any of the applicants former
customers, the third respondent would continue to supply
them.
Thereafter, the servicing of former clients of the applicant by the
third respondent was done by the telesales staff.
Evaluation
[7] On
the papers, I am satisfied that the third respondent did not require
the individual respondents to act in breach of the settlement
agreements which were made an order of court, even if it continued to
make use of the information it had originally obtained from
them
using other staff to continue doing business with the applicant’s
former customers. Ordinarily, in restraint of trade
enforcement
orders, the third party with whom former employees took up employment
in breach of their contracts in restraint of
trade, would also be
subject to an order prohibiting it from continuing to employ them or
to make use of confidential information
or trade connections obtained
from them. Unfortunately for the applicant in this instance, it did
not seek any specific relief
against the third respondent when it
entered into the settlement agreements with the individual
respondents.
[8]
Consequently, the third respondent was not bound by any order
requiring it to desist from conducting business with any former
customers of the applicant. Naturally, it follows that it also cannot
be held in contempt of the settlement agreements as they
did not
require it to do, or prohibit it from doing anything in relation to
the applicant’s customers.
[9] In
the circumstances, it is not necessary to consider the other defences
raised by the third respondent, as the breach of a
court order has
not been established.
[10] On
the question of costs, ordinarily, the third respondent might expect
its costs but even though the third respondent was
not in legal
breach of the order, it clearly pursued a course of conduct that
would allow to continue to benefit from confidential
information
about the applicant’s customers, which it had already obtained
from the individual respondents and did not conduct
itself in a
bona
fide
manner for this reason. Consequently, it would be
inappropriate in all the circumstances for it to obtain a cost award
against
the applicant.
Order
[11] The
third respondent is found not guilty of contempt of this court’s
order in this matter on 10 June 2016.
[12] Each
party must pay its own costs.
_______________________
Lagrange
J
Judge
of the Labour Court of South Africa
APPEARANCES
APPLICANT:
J
J Bitter instructed by Mouyis
Cohen
Inc.
THIRD
RESPONDENT:
HA
Van der Merwe instructed
by
Senekal Simmonds Inc.