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[2017] ZALCJHB 486
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A & A Containers (Pty) Ltd v Mukosi (J2516/17) [2017] ZALCJHB 486 (14 November 2017)
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Not
Reportable
Case
no:
J
2516/17
In
the matter between:
A
& A CONTAINERS (PTY) LTD
Applicant
and
THOMAS
MUKOSI
Respondent
Heard
:
26 October 2017
Delivered
:
14 November 2017
Summary:
A party seeking to enforce a restraint of trade must allege and
prove the agreement as well as its breach by the other party. Clear,
admissible and concise evidence of breach required from a party
alleging breach. Absence of proof of breach means that the party
is
not prejudiced. In
casu
, agreement alleged and
proved, no duress as alleged by the other party seeking to resile
from the agreement. Held (1): The application
is dismissed. Held (2):
The applicant to pay the costs.
JUDGMENT
MOSHOANA,
J
Introduction
[1]
This is an application to restrain and interdict a former employee of
the applicant. The application is opposed by the respondent
the
former employee. The applicant seeks to interdict him from
effectively poaching its customers, to disclose confidential or
business information and to work for a competitor for a period of 12
months in the Western Cape, Free State, Kwazulu-Natal and
Gauteng.
Background
facts
[2]
The respondent commenced employment with
the applicant on 1 February 2005. He was employed as an Operations
Manager. After nine
years of employment, the respondent signed a
restraint of trade agrement. The respondent contends that he signed
the restraint
under duress. The applicant conducts the business of
procuring, fitting and supplying shipping containers to customers in
South
Africa. The applicant makes most of its income from what is
generally referred to as container conversions, which entails
refurbishing
of containers, leasing out containers selling them and
being used for various purposes. The applicant thus claims
protectable interest
in its customer connections as well as
confidential information.
[3]
Over the years, the applicant built a
customer base and amassed various confidential information in respect
of its customers. On
01 June 2017 the respondent handed his
resignation. He was to start a transport company to transport school
children. This being
what he told the owner of the applicant at a
farewell party. The respondent left on 23 June 2017.
[4]
Around 11 September 2017 it came to the
attention of the applicant through a customer that the respondent was
working for a competitor
JM West Engineering (JMW). One of the
customers-RWW, which the respondent had closely worked with whilst in
the employ of the applicant,
was observed at JMW’s premises. An
undertaking was sought from the respondent; which undertaking was not
forthcoming. As
a result, the applicant was advised to launch the
present proceedings. The respondent opposes the application.
[5]
Effectively the defence of the respondent
is that he does not work for JMW. The owner of JMW is his co-director
in a newly formed
business which builds hydroponics containers. The
company was registered on 2 May 2017. As pointed out earlier he says
he signed
the restraint of trade under duress. He was threatened with
dismissal. Therefore, he is not bound by the restraint. He considers
the restraint to be unreasonable as he would be unable to work in the
shipping container industry for a period of 12 months anywhere
in
South Africa.
[6]
For reasons unknown to me the applicant chose not
to respond to the evidence of Mr Wood, who categorically stated that
the respondent
did not influence him in any way or even suggested at
any time that he should move his work to JWW.
Evaluation
[7]
In
order to succeed in a matter like this the applicant bears the onus
to prove the existence of a restraint and its breach
[1]
.
In order to preserve sanctity of contracts once the above is alleged
and proven, the court is bound to uphold enforcement of the
restraint. I have no hesitation in my mind that the applicant has
proven the restraint. The respondent’s belated defence
of
duress cannot be upheld.
[8]
It
seems so that the De Klerk experience made the applicant’s
owner wiser
[VN1]
.
The fact that it took him nine years to be wise is of no moment. It
was necessary for the applicant, given the De Klerk experience,
to
protect itself. Accordingly, I do not believe the respondent’s
version that he was threatened with dismissal. The other
employees
were made to sign similar restraints following the De Klerk’s
experience. Accordingly, I find that the restraint
has been proven.
Was
the restraint breached?
[9]
It is trite that a party in motion proceedings is
to make his or her case in the founding affidavit. The case of breach
is made
thus in this matter:
‘
During
the week of 11 September 2017, a customer of the Applicant (namely
Yusef of Design Initiative came to see me and advised
me that the
Respondent
was
working for one
“Frikkie”… Frikkie was working for the applicant
as a sub-contractor having terminated his involvement with
us and
commenced
competing
business
which he conducts through a company called JM West Engineering
(“JMW”).
[2]
I
decided to and drove past JMW on 14 September 2017 where I witnessed
the respondent’s vehicle parked outside… When
driving
past, I also saw a branded motor vehicle of RWW parked at JMW. RWW is
one of the applicant’s
largest
customers
which, the respondent worked closely with whilst under the
applicant’s employ’.
[3]
[10]
This
evidence seeks to demonstrate that clause 1 and 3
[4]
of the restraint of trade is being breached. On the allegation of
working for the competitor, the respondent denied same and testified
that Chotia informed the owner of the applicant that he only saw him
at premises of the competitor. The evidence of the applicant
on this
point amounts to hearsay. The probity of this evidence lies with
Chotia. There is no confirmatory evidence from Chotia.
[11]
When confronted with a denial, the owner testified
thus:
‘
Futcher
and I have no reason to lie as to what Chotia told us. The fact that
the respondent’s
involvement
with Botha has been uncovered through what Chotia told us supports
our version.’
[12]
It is observed that he now calls it an
involvement
and not employment as allegedly told by Chotia. The applicant bears
the onus to prove the breach. The evidence of the applicant
on this
aspect is weak. Applying the
Plascon
Evans
principle the applicant must fail
on this point. However, it seems obvious why the applicant brought
this application. Such reason
is exhibited by the following evidence:
‘
Had
the respondent
disclosed
the true reasons
as to his departure on resignation, I may have acted differently. It
is as a result of
his
actions
that this application has been launched…’
[5]
[13]
Accordingly, I have no option but to accept the
version of the respondent that he was not employed by a competitor.
Accordingly,
he cannot be held to have breached clause 3 of the
restraint.
[14]
On the aspect of breaching clause 1, the
respondent denied such breach. Most importantly Wood testified as
follows and his evidence
was not challenged at all:
‘
I
can categorically state that Mr Mukosi (the respondent) did not
influence me in any way or even suggested at any time that I should
move my work to JM West Engineering (Pty) Ltd.
[6]
I wish
to categorically state that the last order that was placed with A &
A Containers (Pty) Ltd was in April 2017, which order
was completed
in June 2017 and no further orders were placed with A & A
Containers (Pty) Ltd.’
[7]
[15]
There is no cogent evidence that the respondent
breached clause 1 of the restraint.
Confidential
or business information
[16]
The
respondent agreed not to use or disclose confidential or business
information. For the respondent to be in breach, he must either
use
the information or disclose it. Again the onus is on the applicant to
set out such information and to show that the respondent
used or
disclosed it. The respondent went to great lengths to set out what
the confidential information of the applicant was.
[8]
However when it comes to breach the applicant’s case enters the
realm of speculations. Other than verily believing that the
respondent removed the information
[9]
,
there is no averment that the respondent used or disclosed the
information to any person. Accordingly, there is no evidence of
breach of the clause of confidentiality. Since the applicant has
failed to show that the respondent is employed by a competitor,
what
was said by Mbha J (as he then was) in
Experian
South Africa (Pty) v Haynes and another
[10]
is not applicable in this case.
Conclusion
[17]
I come to the conclusion that there is a valid and
enforceable restraint and that the interest of the applicant is
worthy of protection.
However, I am not satisfied that the respondent
is prejudicing such an interest. As to costs, I find no reason why
the losing party
should not be mulcted with costs.
[18]
In the results I make the following order:
Order
1.
The application is dismissed with costs.
_______________________
GN
Moshoana
Judge
of the Labour Court of South Africa
.
Appearances
For
the Applicant:
Mr A Bishop
Instructed
by:
Aucamp, Gittings & Youngman Inc, Bedfordview.
For
the Respondents: Mr A
R Van Der Merwe.
Instructed
by:
Vos Attorneys, Roodepoort.
[1]
Basson
v Chilwan and others
[1993] ZASCA 61
;
1993 (3) SA 742
(A) at 776H-777B.
[2]
Para 72 of the Founding Affidavit.
[3]
Para 74 of the Founding Affidavit.
[4]
Clause 1-employee agrees to not approach, canvas or solicit any
contacts, clients, customers, suppliers, subcontractors, service
provider’s or other employees for employment or business
reasons of the employer for a period of 12 months after leaving
the
employer. Clause 3-work for a competitor of the employer’s
business for a period within a year (12 months)
[5]
Para 48 of the Replying Affidavit.
[6]
Para 9 of Wood’s Affidavit.
[7]
Para11o Wood’s Affidavit.
[8]
Para 42-63 of the Founding Affidavit.
[9]
Para 76 of the Founding Affidavit. - Notably the respondent denied
that. There was nothing said in reply.
[10]
[2013] 34 ILJ (GSJ) at para 21
[VN1]
Judge
I humbly suggest that Judge summarises what the ‘de Klerk
experience’ is. Just to provide context to its reference.