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[2017] ZALCJHB 493
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Mikeva Cash and Carry (Pty) Ltd and Another v Marx (J3380/17) [2017] ZALCJHB 493 (22 December 2017)
IN
THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Not
Reportable
Case
no: J 3380/17
In
the matter between:
MIKEVA
CASH AND CARRY (PTY) LTD
MASSCASH (PTY)
LTD
First
Applicant
Second Applicant
and
JAN ANDRE MARX
Respondent
Heard:
19 December 2017
Delivered:
22 December 2017
JUDGMENT
TLHOTLHALEMAJE,
J.
Introduction:
[1]
On 12 December 2017, a full judgment and order was handed down by
Lagrange J under case number J2720/17, in the following
terms;
“
Order
[1]
The matter is heard as
one of urgency and any non-compliance with the forms and service
provided for in the Labour Court rules is
condoned.
[2]
The respondent is interdicted and restrained until 30 April 2019
(‘the restraint period’) and within the municipal
area
Mossel Bay (‘the prescribed area’) from being engaged or
obtaining business interests, whether directly or indirectly,
in any
capacity whatsoever in:
2.1
the business conducted under the name and style of Hyper Meats t/a
The Meat
Spot situated at the premises located at 4 Mossel Street,
Mossel Bay, Western Cape province;
2.2
any business which is the same as or similar to or competitive with
the business
of the first applicant.
[3]
During the restraint period the respondent is interdicted within the
prescribed area from directly or indirectly:
3.1
soliciting orders from prescribed customers of the applicants, as
defined in
the fixed term agreement concluded between the 1st
applicant and the respondent on 16 April 2 014 (‘the
agreement’)
for prescribed goods and/or prescribed services as
defined in the agreement;
3.2
canvassing business in respect of prescribed goods and/or prescribed
services,
as defined in the agreement, from prescribed customers of
the applicants as defined in the agreement;
3.3
selling or otherwise supplying prescribed goods and/or prescribed
services,
as defined in the agreement, to prescribed customers of the
applicants as defined in the agreement;
3.4
rendering any prescribed services, as defined in the agreement, to
prescribed
customers as defined in the agreement;
3.5
encouraging, enticing, inciting or persuading any manager or employee
of applicants
to terminate his or her employment with the applicants;
3.6
furnishing any information or advice to any manager or employee of
the applicants
or using any other means, whether directly or
indirectly designed, or in the ordinary course of events calculated
to result in
such manager or employee terminating his or her
employment by the applicants and/or becoming employed more directly
or indirectly
interested in or associated with any other company,
close Corporation, firm, undertaking or concern.
[4]
The respondent is interdicted and restrained from using any
confidential
information of the applicants or disclosing it to any
third party including the entity trading under the name and style of
hyper
meat t/a the Meat Spot.
[5]
The respondent must pay two thirds of the applicants’ costs.
[6]
The applicant must pay the travel and accommodation costs incurred by
the respondent as a result
of the matter being set down in
Johannesburg”.
[2]
On 18 December 2017, the applicants approached the Court on an urgent
basis to seek an order directing that the above judgment
not be
suspended and be declared operative pending the determination of the
application for leave to appeal delivered by the respondent
on 13
December 2017, any subsequent petition to the Labour Appeal Court for
leave to appeal against the Judgment and any subsequent
appeal.
[3]
The background to the dispute between the parties is fully ventilated
by Lagrange J in his judgment. For the purposes of
this
application, it is sufficient to point out that it is common cause
that the first applicant (Mikeva), conducts a wholesale,
retail
butchery, fruit and vegetable cash and carry business from a store in
Mosselbay.
[4]
Mikeva has been operating since 2014, having purchased the business
from the respondent (Marx) and his wife as a going concern
in April
2014. Marx was in turn employed by Mikeva as its Perishables Manager,
until he left its employ on 30 April 2017. Marx
in September 201
opened a wholesale and retail butchery business trading as ‘Hyper
Meat t/a The Meat Spot, in direct competition
with Mikeva and from
premises approximately 200 metres from Mikeva’s store in
Mosselbay. This had led to an urgent application
that resulted with
the Lagrange J’s judgment.
[5]
The applicants
approached this Court on an urgent basis in terms of section 18 (1)
and 18 (3) of the Superior Courts Act
[1]
,
read together with Rule 49 of the Uniform Rules of the High Court of
South Africa, and section 158 (1) (a) (iii) of the Labour
Relations
Act
[2]
,
read together with rules 11 (3) and 11 (4) of the Labour Court Rules.
The application followed upon correspondence sent Marx to
give an
undertaking that he would abide by the order granted by
Lagrange J to avoid the applicants from approaching the Court
in
contempt proceedings. A response received from Marx’s attorneys
of record was that he had ceased to conduct business under
the name
and style of Hyper Meats t/a The Meat Spot. Marx thereafter delivered
an application for leave to appeal against the whole
judgment and
order of Lagrange J on 13 December 2017.
[6]
The urgency of this matter was placed in dispute on the basis that
the application was premature. I will address the issue of
the
procedural nature of the relief sought in due course. For now, I
accept that given the nature of the application before Lagrange
J,
the issues that were ventilated at those proceedings, the nature and
scope of the final order issued, the matter ought to be
treated as
urgent.
The
application of section 18
of
the Superior Courts Act
[3]
10 of 2013.
[7]
The applicant correctly pointed out that the Rules of this Court,
together with the provisions of the Labour Relations Act are
silent
in regard to the status of the final orders issued by the Court in
circumstances where an application for leave to appeal
has been
lodged. The
lacuna
is somehow addressed in the provisions of
Rule 11 (3) and 11 (4) of the Rules of this Court, which provide that
the Court may then
adopt any procedure that it deems appropriate in
the circumstances.
[8]
Flowing
from several decisions in this Court
[4]
,
which are in contrast to the approach adopted earlier in
L’Oréal
South Africa (Pty) Ltd v Kilpatrick
[5]
,
there can be no doubt that by virtue of the Labour Court being a
superior Court and thus subject to the Superior Courts Act, section
18
[6]
of that Act finds application in this Court. This is so to the extent
that there is no conflict between the provisions of that
Act and
those of the Labour Relations Act in terms of which this Court was
established, within the contemplation of section 2 (3)
of that
Superior Courts Act
[7]
.
To the extent that the LRA or the Rules of this Court are silent on
the status of final orders pending appeal proceedings, there
can be
no talk of any such conflict.
[9]
The answering affidavit was deposed to by
Marx’s attorney of record on his behalf, and certain procedural
requirements were
raised in regard to the reason the order to execute
should not be granted. It was common cause that Marx had a day after
the Lagrange
J’s order was issued, lodged a Notice of
application for leave to appeal. It was argued on his behalf that
once he had lodged
that application despite his earlier undertaking
that he had ceased to trade, he was entitled to carry on trading. It
was further
submitted on his behalf that in terms of paragraph 15.2
of this Court’s Practice Manual, Marx was required to file his
submissions
in respect of the leave to appeal within 10 days, which
had commenced on 13 December 2017. Those submissions had not been
filed
as the
dies
was on 29 December 2017, and according to the arguments, there was no
need to hear this application as set down by the applicant,
more
specifically since it is the holiday season, and attorneys were not
easily available.
[10]
Further arguments advanced on behalf of
Marx were that if the leave to appeal was granted, then this
application would fail, and
conversely, if the application for leave
to appeal was to fail, then this application should succeed. To this
end, the argument
was that this application prejudged the application
for leave to appeal and should be dismissed pending the leave to
appeal hearing
wherever these intertwined questions can be
determined.
[11]
As
to whether it is a requirement that a complete cause of action (leave
to appeal in this case) must be in motion prior to approaching
the
Court in terms of section 18 of the Superior Courts Act is an issue
that was addressed by Kathree-Setiloane J in
Fidelity
Security Services (Pty) Ltd v Mogale City Local Municipality and
Others
[8]
.
The nub of that decision is that because the relief which is sought
with such applications is procedural or interlocutory rather
than
substantive in nature, it was not necessary for the applicant to have
a complete cause of action. Second, the interpretation
that the
applicants in this case must wait until Marx has filed his complete
application in respect of the leave to appeal has
the result that the
applicants in this case as the successful party, cannot approach this
Court until the period of 10 Court days
has lapsed (since the notice
was filed). During this
interim
period, the applicants are expected to do nothing as they cannot
enforce its favourable order. On this approach, this would
effectively
prevent the applicants from approaching the Court to
assert their rights flowing from the favourable order, and prevent
the Courts
from taking appropriate steps to ensure proper compliance
with its orders. This approach cannot be countenanced on the
reasoning
of Kathree-Setiloane, as it would lead to
an
outcome that could not have been intended by the Legislature; is
inflexible and formalistic in the extreme; constitutes an
unconstitutional
limitation of the right of access to Court in terms
of s 34 of the Constitution; and is inconsistent with the principle
that when
interpreting statutes “
a
sensible meaning
is to be preferred to one that leads to insensible or unbusinesslike
results or undermines the apparent purpose
of the [provision]”
.
[9]
[12]
In the light of the above, the applicant in
this case was within its rights to approach the Court with an
application to execute
its favourable order. It was not a requirement
for it to wait until the full application for leave to appeal was
properly before
the Court, and there is further no requirement that
the application for leave to appeal and the application to execute
should be
heard simultaneously as they are intertwined.
[13]
An
application to execute can be brought at any time if it is apparent
that the other party has no intention to comply with a Court
order.
The only issue for consideration is whether the application is
urgent, (an issue already disposed of in this case). Furthermore,
and
in line with a further exposition of the provisions of section 18 by
Van Niekerk J in
Fidelity
Security Services (Pty) Ltd v Naidoo and Another, an
applicant is required in an application for leave to execute, to
demonstrate that the facts and circumstances of the particular
application are exceptional and warrant a deviation from the normal
rule
[10]
.
This required 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. Furthermore, the applicant was 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
[11]
.
Application
to the facts:
[14]
Applications
for the enforcement of restraint of trade agreement and undertakings
are by their very nature urgent
[12]
.
In this case, and as it was correctly pointed out, it is not
necessary to deal with the merits of the matter. Central to Lagrange
J’s order is that having treated the application as urgent,
Marx was interdicted
and
restrained until 30 April 2019, and within the municipal area of
Mossel Bay, from being engaged or obtaining business interests,
whether directly or indirectly, in any capacity whatsoever in the
business conducted under the name and style of Hyper Meats t/a
The
Meat Spot, and in any business which is the same as or similar to or
competitive with the business of the applicants. The interdict
and
restraint extended to confidential information and solicitation of
the applicants’ customers or use of trade connections.
[15]
Notwithstanding
the differences in approach between the various decisions referred
to
[13]
and
L’Oréal
South Africa (Pty) Ltd v Kilpatrick
,
and to the extent that in the latter decision it was acknowledged
that the provisions of section 18 (1) and 18 (3) were applicable
in
this Court, the parties in this case agreed that they could not
quarrel with the legal principles extrapolated in that regard
by
Snyman AJ with
particular
reference to restraint of trade disputes. In this regard, Snyman AJ
held that;
“
In
the case of a restraint of trade interdict, it is the immediate
protection of the protectable interest of the applicant that
is
critical to the application even having any purpose. It is all about
the elimination of continued risk, which in the case of
a protectable
interest relating to confidential information can only be achieved by
interdicting employment of the individual respondent
with the
competitor where such respondent is so employed (which is the case in
the current matter). If an applicant manages to
pass the quite
substantial hurdle of convincing a Judge to exercise the Judge’s
discretion in the applicant’s favour,
it is in my view
untenable that all this effort and the very objective that needs to
be achieved is thwarted by the respondent
party simply proceeding
with an appeal. It is, in my view, the nature of restraint of
trade proceedings that in itself must
contemplate ‘exceptional
circumstances’. As the Court said in
Incubeta
Holdings
, which I
agree with:
‘
Do
these circumstances give rise to 'exceptionality' as contemplated? In
my view the predicament of being left with no relief, regardless
of
the outcome of an appeal, constitutes exceptional circumstances which
warrant a consideration of putting the order into operation.
The
forfeiture of substantive relief because of procedural delays, even
if not protracted in bad faith by a litigant, ought to
be sufficient
to cross the threshold of 'exceptional circumstances'.’
[14]
[16]
It cannot be
doubted that in light of the Lagrange J’s order, if the
judgement is not executed, Marx will continue with business
as usual
to the detriment and prejudice of the applicants. The submissions in
respect of the leave to appeal are yet to be filed.
The Notice in
regard to the leave to appeal and any subsequent submissions are or
were to be filed during Court recess, and the
likelihood of the leave
to appeal being considered by Lagrange at any time before the next
Court term in the new year are as remote
as it can be. In the event
of the leave to appeal being unsuccessful, it is more than likely
that Marx will petition the Labour
Appeal Court, despite his
attorneys of record having no current instructions in that regard. In
the unlikelihood of such a petition
being granted, by the time the
matter comes before the Labour Appeal Court, it would have become
moot as the period of the restraint
would have come and gone
[15]
.
[17]
The very purpose of the order and judgment of Lagrange is to protect
the interests of the applicants, and to the extent that
such an order
was granted on an urgent basis, to allow Marx to continue with
business as usual pending the application for leave
to appeal will
effectively erode the urgency of that relief, open the applicants’
protectable interests to abuse and effectively
render the judgment
and order nugatory.
[18]
I agree with the contentions made on behalf of the applicants that
indeed there are exceptional circumstances that prevail
in this
matter that requires that the execution order be granted. On their
uncontested version, Marx in the light of his misguided
approach has
continued to use and disclose the applicant’s confidential
information, thus defeating the very object of the
relief granted. It
is uncontested that Marx
remains in a position to
conduct business under the name and style of Hyper Meats t/a The Meat
Spot, in direct competition with
the applicants. It further remains
uncontested that he had also approached the applicants’
suppliers, customers and employees.
Such conduct effectively
erodes
or tramples upon the very interests which the Court sought to protect
with the relief it had granted.
[19]
The submissions made on behalf of Marx were to the
effect that the applicants would not suffer irreparable harm on the
basis that
he keeps detailed records of all sales and all input and
output costs for management purposes. It was argued that should he
not
be successful in the appeal, it would be easy to quantify alleged
damages in a damages trial. This tender, it was argued on his
behalf,
made this application redundant.
[20]
Other than the above tender, it was submitted that
on the contrary, he would suffer immense prejudice and harm which is
real and
immediate, in that he is in possession of perishable stock
that must be sold, and further that he employed employees that may
have
to be retrenched. It was contended that the harm to him in the
event of the appeal succeeding far outweighed the harm to the
applicants
in the event of this application not being granted and the
appeal itself being dismissed.
[21]
There are obvious difficulties with Marx’s
belated ‘tender’. The first is that effectively he is
saying to the
applicants that he should be allowed to ignore the
Court’s judgment and continue with business as usual to the
detriment
of their interests. He is further inviting the applicants
to trust him to keep a proper account of his sales and all input and
output costs, so that they can be able to claim damages from him at a
later stage. The obvious difficulty with this tender is that
the
applicants have already approached the Court and secured an order
they sought in order to protect their interests. It being
so, why
would they want to pursue further litigation and claim damages from
Marx when the very essence of that Court order is to
prevent the very
same damages that they may suffer had they not secured the order?
Effectively then, a claim for damages in such
cases is a non-starter.
Worst still, it would be foolhardy for the applicants to trust Marx
to keep information that may be used
against him in the near future,
more specifically in circumstances where he had shown no inclination
whatsoever to keep to his
undertakings.
[22]
The judgment and order having been obtained on 12 December 2017, if
indeed Marx had stocked substantial perishables from that
date that
he cannot dispose of as at the hearing of this matter, it is apparent
that he had no intentions whatsoever to consider
himself bound by the
order of this Court. He cannot therefore complain about the very
consequences he should have foreseen when
adopting the approach that
it was business as usual after the Court order was obtained.
[23]
The tried, tested and cynical argument that ‘
employees will
be retrenched or would suffer if the order is granted’
is
gratuitously abused in this Court to gain sympathy in circumstances
where a party is the direct cause of the very suffering
that
vulnerable employees would be subjected to as a result of an adverse
Court order. That argument is in most instances self-serving.
Inasmuch as the Court should be sensitive to the plight of the
vulnerable employees concerned, this by all accounts cannot be used
as justification to deny the applicants an order which the merits of
their initial application and the interests of justice dictate
they
should be entitled to.
[24]
I have further had regard to the submissions made in regard to the
merits of the leave to appeal. It is not the purpose of
this judgment
to make a pronouncement on the merits of the leave to appeal. Having
studied the Lagrange J’s judgment however,
and the full and
detailed reasons for that order, it can be said that
prima facie
,
Marx’s prospects of success with the application for leave to
appeal appear remote.
[25]
To conclude then, the applicants have discharged the onus of showing
exceptional circumstances in this case, and have also
demonstrated on
a balance of probabilities, the irreparable harm they would suffer if
the order to execute is not granted as opposed
to Marx, whose
contentions in regard to any harm to him are not only self-serving
but also indicate that the alleged harm is self-inflicted.
[26]
The applicants are in possession of a favourable judgment and order
enforcing the restraint provisions against Marx. The interests
of
justice and fairness dictate that the applicants should be able to
enjoy the protection of that order whilst Marx pursues his
rights in
respect of the leave to appeal. It would be iniquitous to hold
otherwise, as that favourable order if not immediately
executed, will
be rendered meaningless. The applicants have accordingly made out a
case for the relief sought as per their Notice
of Motion.
Costs:
[27]
The applicants sought a cost order in the event that they were
successful. Having had regard to considerations of law and fairness,
I see no reason why costs should not be awarded, particularly in view
of different messages sent by Marx upon receipt of the Court
order on
12 December 2017. He had upon a request by the applicants, made an
undertaking that he had ceased to operate his business
under the name
and style of Hyper Meats
t/a
The Meat Spot. Hardly a day later
he had filed his notice to file an application for leave to appeal,
and as highlighted in the
founding affidavit, he had continued to
trade as if the Court order did not exist, on the misguided notion
that he was entitled
to do so. Considerations of law and fairness in
these circumstances dictate that he should be burdened with the costs
of this application.
Order:
[28]
In the premises, the following order is made;
1.
The matter is heard as one of urgency and any non-compliance
with the
forms and service provided for in the Labour Court rules is condoned.
2.
The Judgment and Order handed down by Lagrange J on 12 December
2017
is not to be suspended, and is declared operative pending the
determination of the application for leave to appeal delivered
by the
Respondent on 13 December 2017, any subsequent petition to the Labour
Appeal Court for leave to appeal against the judgment,
and any
subsequent appeal.
3.
The Respondent is ordered to pay the costs of this application.
_____________________
E.
Tlhotlhalemaje
Judge
of the Labour Court of South Africa
Appearances:
For
the First and Second Applicants:
Mr. F Malan of Edward Nathan Sonnenbergs INC
For
the Respondent:
Adv. J Moorcroft
Instructed
by:
Viljoen-French & Chester INC
[1]
Act
No 10 of 2013
[2]
Act
66 of 1996
[3]
Act
10 of 2013
[4]
Luxor
Paints (Pty) Ltd v Lloyd
(2017)
ILJ 1149 (LC
);
Wenum v Maquassi Hills Local Municipality (J 1684/15, 22 July 2016);
Fidelity Security Services (Pty) Ltd v Naidoo and Another
(
J1837/2015)
[2016] ZALCJHB 70 (3 February 2016)
;
Tshepo Joseph Matseba v Liberty Group Limited Case no: J 2920/16
(Delivered on 14 December 2016;
South
African Maritime Safety Authority (‘SAMSA’) v Muroro
Dziruni Case No: J 1818/17 (Delivered on 15 December 2017)
[5]
(2015)
36 ILJ 256 (LC)
at
paragraphs 13 and 21 where Snyman AJ held that;
“
The
simple fact is that the SC Act does not directly apply to the Labour
Court and Labour Appeal Court. The Labour Court
is not
established in terms of the SC Act, but in terms of the LRA.
In terms of section 151(1) of the LRA: ‘
The Labour
Court is hereby established as a Court of law and equity.’ And
further, in terms of section 151(2):
‘The Labour Court is a
superior Court that has authority, inherent powers and standing, in
relation to matters under its
jurisdiction, equal to that which a
Court of a Division of the High Court of South Africa has in
relation to matters under its
jurisdiction’. As to the
relevant powers of the Labour Court, section 158(1), provides that:
‘The Labour Court
may-
(a)
make any
appropriate order, including- …. (iii) an order
directing the performance of any particular act which
order, when
implemented, will remedy a wrong and give effect to the primary
objects of
this Act
; (iv) a declaratory order
….’. Finally, and generally, the Labour Court has
the power to
deal with all matters necessary
or incidental to performing its functions in terms of the LRA or any
other law. This makes the
Labour Court certainly comparable if not
identical to any High Court when exercising duties and functions
under its jurisdiction,
but this must also mean that the Labour
Court is governed by the provisions of its own statute (the LRA) and
not the SC Act.”
(Authorities omitted)
And,
“
It is accordingly
my conclusion that the SC Act does not apply to the Labour Court or
Labour Appeal Court. However, selected provisions
from such Act may
from time to time be imported or adopted by the Labour Court where
the same is complimentary to the Labour
Court’s own rules,
provisions and processes. This the Labour Court does by virtue
of its own powers in terms of Section
158(1) of the LRA referred to
above, and Rules 11(3) and (4) of its own Rules. The Labour Court
therefore imports what it wants,
and needs, from the SC Act, only
where it is in the interest of proper administration and process in
the Labour Court.”
[6]
Which
provides:
18.
Suspension of decision pending appeal
(1)
Subject to subsections (2) and (3), and unless the Court under
exceptional
circumstances orders otherwise, the operation and
execution of a decision which is the subject of an application for
leave to
appeal or of an appeal, is suspended pending the decision
of the application or appeal.
(2)
Subject to subsection (3), unless the Court under exceptional
circumstances
orders otherwise, the operation and execution of a
decision that is an interlocutory order not having the effect of a
final judgment,
which is the subject of an application for leave to
appeal or of an appeal, is not suspended pending the decision of the
application
or appeal.
(3)
A Court may only order otherwise as contemplated in subsection (1)
or (2),
if the party who applied to the Court to order otherwise, in
addition proves on a balance of probabilities that he or she will
suffer irreparable harm if the Court does not so order and that the
other party will not suffer irreparable harm if the Court
so orders.
(4)
If a Court orders otherwise, as contemplated in subsection (1)-
(i)
the Court must immediately record its reasons for doing so;
(ii)
the aggrieved party has an automatic right of appeal to the next
highest
Court;
(iii)
the Court hearing such an appeal must deal with it as a matter of
extreme
urgency; and
(iv)
such order will be automatically suspended, pending the outcome of
such
appeal.
(5)
For the purposes of subsections (1) and (2), a decision becomes the
subject
of an application for leave to appeal or of an appeal, as
soon as an application for leave to appeal or a notice of appeal is
lodged with the registrar in terms of the rules.”
[7]
Which
provides that;
‘
The
provisions of this Act relating to Superior Courts other than the
Constitutional Court, the Supreme Court of Appeal or the
High Court
of South Africa, are complementary to any specific legislation
pertaining to such Courts, but in the event of a conflict
between
this Act and such legislation, such legislation must prevail.’
[8]
2017
(4) SA 207 (GJ)
[9]
At paragraphs 9 - 25
[10]
The
‘
threshold
factual test’ referred to in
Incubeta
Holdings (Pty) Ltd and another v Ellis and another
2014
(3) SA 189 (GJ)
[11]
At
para 6
[12]
Mozart Ice
Cream Franchises (Pty) Ltd v Davidoff
and
Another
2009
(3) SA 78
(C) 89A
.
[13]
fn
4
[14]
At
para 46
[15]
The
facts and circumstances of
Ball
v Bambalela Bolts (Pty) Ltd and Another
(2013)
34 ILJ 2821 (LAC)
are
a case in point