About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Johannesburg Labour Court, Johannesburg
SAFLII
>>
Databases
>>
South Africa: Johannesburg Labour Court, Johannesburg
>>
2017
>>
[2017] ZALCJHB 489
|
|
Super Group Trading (Pty) Ltd v Labusschagne and Another (J2268/17) [2017] ZALCJHB 489 (14 November 2017)
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Not
Reportable
Case
no:
J
2268/17
In
the matter between:
SUPER
GROUP TRADING (PTY) LTD
Applicant
and
LABUSSCHAGNE
ISAK ABRAHAM
First
Respondent
PALMTREE
DISTRIBUTORS (PTY) LTD
Second Respondent
Heard
:
26 October 2017
Delivered
:
14 November 2017
Summary:
An application to enforce a restraint of trade is generally heard
on an urgent basis. Urgency follows as a matter of course. A party
seeking to enforce a restraint of trade must allege and prove the
agreement as well as its breach by the other party. Held (1):
The
applicant is interdicted and restrained. Held (2): Each party to pay
its own 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 first
respondent the
former employee. The applicant seeks to interdict him from soliciting
or touting whether directly or indirectly
for his own benefit or the
benefit of any other entity or person including the second
respondent, any of the applicant’s
customers listed on the
schedule attached to the notice of motion. Also from using the
confidential information and trade secrets
of the applicant in any
manner whatsoever and from disclosing it to the second respondent or
any other third party.
Background
facts
[2]
As a sales representative at Namib
Distributors (Pty) Ltd (Namib), the first respondent was recruited to
join the applicant during
May 2010. Upon joining the applicant, the
first respondent’s customers at Namib followed him and became
the customers of
the applicant. On 3 May 2010, the applicant and the
first respondent entered into a restraint of trade agreement. The
first respondent
became a sales representative in Polokwane. He was
the sole representative for the entire Polokwane region, which
effectively covered
the whole of Limpopo.
[3]
On 25 July 2017, after 7 years of
employment with the applicant as set out above, the first respondent
resigned with immediate effect.
Attempts were made to dissuade the
first respondent from resigning all of which drew blank. On 26 July
2017, the first respondent
referred a dispute of alleged constructive
dismissal. During a conciliation meeting, which happened on 31 August
2017, the applicant
discovered that the first respondent has taken up
employment with the second respondent. Upon that discovery the
applicant’s
attorneys of record sought some undertakings from
the first respondent. The first respondent refused to give any
undertaking.
[4]
On 20 September 2017, 15 days after the refusal to
undertake, the applicant launched the present proceedings. The first
respondent
opposed the reliefs sought by the applicant.
Evaluation
Lack
of urgency
[5]
One of the defences raised by the first respondent
was that the matter is not urgent at all. Generally, matters
involving a restraint
of trade are considered to be urgent in nature
primarily because of the duration of the restraints. The restraint in
casu
is to
endure for a period of a year. At the time of hearing this matter,
the remaining period of restraint was about eight months.
The basis
for attacking urgency was simply that the applicant delayed in
approaching the urgent court. In arguing that there was
a delay, the
first respondent commence reckoning the days from the date of his
resignation. That is a wrong date. The applicant
only became aware of
the breach on 31 August 2017.
[6]
On 1 September 2017, the applicant sought an
undertaking which if given would have obviated this application. On 5
September 2017,
the first respondent refused to give an undertaking.
Generally speaking, one would expect the applicant to approach the
court at
the very least a week thereafter. I am not in any manner
suggesting that a week is a reasonable period to approach the court.
Each
case ought to be judged on its own facts. However, what the
applicant did was to approach counsel and gave instructions on or
about
12 September 2017. This is six days after the refusal to
undertake. From 13 September 2017 to 19 September 2017, the
applicant’s
IT department was seeking to gather evidence of
breach.
[7]
I
am unable to agree with the first respondent that the applicant
delayed. To my mind the applicant acted swiftly and expeditiously
and
cannot be non-suited.
[1]
Therefore the defence of lack of urgency is not upheld.
Is
there a restraint agreement?
[8]
There is no dispute that the parties entered into
a restraint of trade agreement. The first respondent alleges that the
restraint
is unreasonable and restrictive. Therefore, there exists a
valid agreement between the parties.
Is
the agreement enforceable?
[9]
The
first respondent is of the view that the agreement is unreasonable
and therefore unenforceable. In law, it is the duty of the
applicant
to show that the restraint is reasonable.
[2]
In this regard the applicant’s testimony is that the restraint
is fair and reasonable in terms of duration and area.
[3]
In response the first respondent simply suggested that the covenant
is overly burdensome and unreasonable. He poses no threat to
the
applicant since two months had lapsed after he left the applicant’s
employ. I have no reason to believe that the covenant
is
unreasonable. Therefore the restraint is enforceable in law.
[4]
Was
the restraint breached?
[10]
It
is trite that a party in motion proceedings is to make his or her
case in the founding affidavit. Clause 17 states that one year
after
termination of employment, the first respondent would not be employed
by a competitor. He shall not solicit or tout clients
of the
applicant
[5]
. The first
respondent does not dispute employment with the second respondent, a
competitor. He testified thus:
‘
It
submitted that I have a right to secure employment and so provide for
my family. I have already set out my version that the restriction
of
the restraint is unreasonable and the area which the Applicant seeks
to restrict my employment is burdensome. It cannot be said
that it is
in the interest of public policy to restrain a simple salesman such
as me from earning a basic income’.
[11]
When
someone alleges that he is not bound by a restraint to which he had
assented in a contract, he bears the onus of proving that
enforcement
of the restraint is contrary to the public interest.
[6]
Other than alleging that the covenant is against public policy, the
first respondent has failed to prove how and in what manner.
Since
the first respondent is in the employ of the second respondent, he is
in breach of the restraint.
[12]
With regard to touting and soliciting the clients
of the applicant, the applicant testified that one Matsemela found
the first respondent
at one of the applicant’s customers being
there to solicit orders from them. In fact, two customers in Naboom
were lost to
the first and second respondent. The first respondent
does not seriously challenge the allegations particularly that
Matsemela
found him at one customer soliciting orders. He attributes
the loss of customers to poor service delivery. The question is how
does he know this? He knew this because he approached those customers
and made them to sign some declarations. Given the contents
of the
declarations, it requires no rocket scientist that the first
respondent touted and solicited them. It does not appear to
have been
a wise move to do so.
[13]
Regarding confidential information and trade
secrets, it is undisputed that the first respondent had access to
customers of the
applicant. I am satisfied that in the course of
access the first respondent was availed to confidential information
and trade secrets.
There is a real likelihood that he can use that
and or disclose that to the second respondent or other parties. The
applicant is
entitled to be protected in this regard.
[14]
I am therefore satisfied that the first respondent
has breached the restraint. Accordingly, his conduct is prejudicing
the applicant’s
protectable interest. On the basis of the above
breaches, the applicant is entitled to the interdict sought.
Issue
of costs.
[15]
The
Labour Appeal Court (LAC) in
Ball
v Bambelela Bolts (Pty) Ltd
[7]
has already decreed that since this matters raises a constitutional
issue-breach of section 22 of the Constitution, a rule of costs
following the results does not apply. To my mind it cannot be said
that the opposition by the first respondent was vexatious. Therefore,
the appropriate order to make is that of each party paying its own
costs.
Conclusion
[16]
I come to the conclusion that there is a valid and
enforceable restraint and that the interest of the applicant is
worthy of protection.
I am satisfied that the first respondent is
prejudicing such an interest. As to costs, the appropriate order to
make is that each
party to pay its own costs.
[17]
In the results I make the following order:
Order
1.
The first respondent is hereby interdicted and
restrained until after 31 July 2018 from soliciting or touting
whether directly or
indirectly for his own benefit or the benefit of
any other entity or person including the second respondent, any of
the applicant’s
customers listed on the schedule attached to
the notice of motion issued on 20 September 2017.
2.
The first respondent is ordered to immediately
return to the applicant all confidential information including but
not limited to
information related to the applicant’s
customers, products, pricing, financial and commercial records,
customer prospects,
files, documents, and any other documentation and
property belonging to the applicant or relating to any client of the
applicant
that are in his possession.
3.
The first respondent is interdicted and restrained
from using the confidential information and trade secrets of the
applicant in
any manner whatsoever and from disclosing it to the
second respondent or any third party.
4.
Each party to pay its own costs.
_______________________
GN
Moshoana
Judge
of the Labour Court of South Africa
.
Appearances
For
the Applicant:
Mr Miltz SC with Mr
Pocock
Instructed
by:
Fluxmans Inc, Rosebank.
For
the Respondents: Mr R
Venter.
Instructed
by:
Louis Verveen Attorneys, Polokwane.
[1]
See
Wespoint
Trading 91 CC t/a SkinPhd v Smit
Case J967/16 delivered on 9 June 2016 para 9
[2]
Marion
White v Francis
[1972] 3 All ER 857.
[3]
Paras 85-86 of the founding affidavit.
[4]
Basson
v Chilwan and others
[1993] ZASCA 61
;
1993 (3) SA 742
(A) at 776H-777B
[5]
Clause 17 page 61 of the pleadings.
[6]
John Saner Agreement in Restraint of Trade in South Africa Law issue
13 (October 2011) and
Experian
SA (Pty) Ltd v Haynes and Another
2013 (1) SA 135 (GSJ)
[7]
[2013] 9 BLLR 843
(LAC)