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[2018] ZALCJHB 203
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Stratosat Datacom (Pty) Ltd v Vermaak and Another (J583/2018) [2018] ZALCJHB 203 (14 June 2018)
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Not reportable
Case number: J 583/2018
In
the matter between:
STRATOSAT
DATACOM (PTY)
LTD
Applicant
and
IGNATIUS
PETRUS
VERMAAK First
Respondent
TINSKY
CONNECT (PTY)
LTD Second
Respondent
Heard:
3 May 2018, final affidavits and submissions filed by 16 May 2018.
Delivered:
14 June 2018
Summary:
Urgent application to enforce restraint of trade undertakings.
JUDGMENT
PRINSLOO.
J
Introduction:
[1]
The Applicant filed an urgent application
seeking to interdict and restrain the First Respondent (Vermaak) for
his own account or
as an employee, from carrying on or being engaged,
interested or concerned, whether directly or indirectly, in the
business of
the Second Respondent (Tinsky) and any business carried
on in competition with the Applicant’s business.
[2]
The Applicant also seeks to interdict and
restrain Vermaak from soliciting any business from any person who was
a customer of the
Applicant at any time during his employment and
from divulging or using any of the Applicant’s confidential
information.
[3]
The Respondents opposed the application.
[4]
Vermaak resigned from the Applicant’s
employ in September 2017 and left at the end of September 2017. The
urgent application
seeking to enforce the restraint of trade
agreement was filed only in March 2018 and enrolled for hearing on 3
May 2018.
[5]
Vermaak took issue with urgency and
submitted that the matter is not urgent because the Applicant waited
for more than five months
to launch the urgent application. The
attack on urgency is not entirely without merit. However, I am
mindful of the fact that restraint
matters are inherently urgent and
in casu
it
is my view that it would be in the interest of the parties that the
matter be decided.
Material facts:
[6]
The Applicant conducts business as a
technology company that specializes in the supply of satellite,
wireless communication, astronomy
products and solutions for the
African market. The Applicant provides services to major global
system for mobile communications
(GSM) operators, internet service
providers and consumer markets in numerous industries and supplies
tailor-made solutions to improve
connectivity in Africa.
[7]
The Applicant operates within a highly
competitive and specialised industry with a finite number of
customers that require telecoms
of the nature the Applicant offers.
[8]
The Applicant employed Vermaak in February
2009 as a VSAT engineer and his contract of employment contained
restraint and confidentiality
undertakings. These were however
superseded when the parties concluded a restraint agreement (the
restraint) in January 2010. The
Applicant was promoted from the
position of VSAT engineer to sales manager and his responsibilities
included
inter alia,
meeting
with clients to build and maintain good relationships, negotiating
and closing deals, representing the Applicant at trade
associations,
preparing sales reports and managing and driving sales as per the
yearly sales budget. The Applicant deemed it necessary
and sought to
protect its interests in this regard by concluding the restraint
agreement in January 2010.
[9]
In January 2016 Vermaak was promoted to
sales director for the Democratic Republic of Congo, Angola and
Mozambique and in this capacity
he was entitled to commission. As
sales director Vermaak’s function was
inter
alia,
to develop new business
opportunities with the in-country managers in the respective
countries where the Applicant does business
and to introduce new
products and services into these markets, to grow revenue streams and
to build and maintain relationships
with the clients.
[10]
Vermaak resigned from the Applicant’s
employ on 1 September 2017 and gave thirty days’ notice. In his
resignation letter
Vermaak indicated his intention to pursue a career
in self-employment.
The restraint of trade agreement
[11]
The Applicant approached the Court on an
urgent basis to enforce the terms of the restraint of trade agreement
the parties had entered
into in January 2010.
[12]
The provisions of the restraint entered
into in January 2010 are relevant, not only to the determination of
this application, but
also to provide context to the agreement as
entered into between the parties and it is necessary to consider the
restraint agreement
in its entirety. The restraint reads as follows:
‘
MEMORANDUM
OF AN AGREEMENT ENTERED INTO BY AND BETWEEN:
STRATOSAT
DATACCOM (PTY) LTD (“The Employer”)
and
NAAS VERMAAK (“The Employee”)
WHEREAS:
1.
The
employer trades in the specific market of satellite equipment sales
and distribution as well as the marketing and sale of related
products inclusive of bandwidth and electronic solutions;
-
Installation
of Vertex Earth station Antennas
-
Specialized
Supervision Services of Vertex Earth Station Antennas
-
Supply
of General Dynamics C4 Satcom Product
-
Supply
of Satellite Hardware components
2.
The
Employee is currently employed by the Employer in the position of
General Manager and, by virtue of his employment the employee
has
gained specific knowledge of the employers know how, marketing
tactics, electronic trade secrets, client base, financial structures
and technical knowhow;
3.
The
employer intends to enter into an agreement with Specialized Turn Key
Services (Pty) Ltd, Commsience (Pty) Ltd / Satellite 2000
or any
company owned or managed by shareholders, which company trades as the
employers and competitor in its field of business
and, in terms
whereof, the employers intends to second the Services of the employee
for use by its competitor on certain terms
and conditions;
4.
the
employer has a protectable interest in the knowledge and expertise
obtained by the employee by virtue of his employment with
the
employer;
5.
the
employee has consented to bind himself to the restraint of trade
agreement below.
Now
therefore it is agreed that:
1.1
For
the purposes of this clause, “confidential information”
means all the information referred to in clause 1.2 (b)
below.
1.2
The
employee acknowledges that:
(a)
During
his employment with the company he has had access to confidential
information of the company including, but without being
limited to,
information relating to the identity of customers and suppliers of
the company, the pricing methods of the company,
its trade
connections, its manufacturing formulae and processes and its
financial and marketing operations;
(b)
If
any of the confidential information were to be given to or used by
the company’s competitor or potential competitors the
company
would be severely prejudices and will suffer substantial damage and
loss;
(c)
Because
he has had access to the confidential information during the period
of his employment with the company it is reasonable
for the
protection of the company that he should be restrained from using it
for his own or anyone else’s benefit.
1.3
for
the reasons stated in 1.2 above the employee undertakes that:
(a)
for
as long as he is employed by the company and after the expiry or
other termination of his employment for any reason whatsoever,
he
will not divulge any of the confidential information to any person
whatsoever except insofar as may be necessary for the proper
performance of his duties to the employer in terms of this agreement;
and
(b)
Nor
will he use any of the confidential information for his own or anyone
else’s benefit, unless and until, and then only
to the extent,
that the confidential information becomes public knowledge through no
fault of his.
1.4
For
the protection of the business of the employer against the use by
anyone else of the confidential information the employee undertakes
that while he is employed by the employer and for a period of 2 years
after the termination of his employment with the employer
for any
reason whatsoever he will not, either for his own account or as an
employee, be a representative, contractor or employee
for Specialized
Turn Key Services (Pty) Ltd, Commsience (Pty) Ltd / Satellite 2000 or
any affiliate companies mutually or operated
by the same shareholders
or:
(a)
Carry
on or engaged, interested or concerned, whether financially or
otherwise and whether directly or indirectly, in any business
carried
on at the date on which he ceased to be employed by any company or
person who operates in competition with the company
anywhere in
Africa, as specified in clause 1.4
(b)
Solicit
business from or canvass any a person who was a customer of the
company at any time during the period of his employment
with the
company;
1.5
The
employee acknowledges that each of the undertaking made by him in
terms of his agreement shall:
(a)
Be
separate and divisible from all the other undertakings;
(b)
If
any undertaking is or becomes unenforceable, be severable from and
not affect any of the other undertakings or the rest of his
agreement;
(c)
Be
deemed to be reasonable and necessary to protect the lawful interests
of the company.
1.6
The
provisions of this clause shall survive the expiration or earlier
termination of his employment agreement for any reason whatsoever.’
[13]
In summary, the restraint recorded the
Applicant’s protectable interest as the knowledge and expertise
obtained by the employee
by virtue of his employment with the
Applicant and ‘confidential information’ includes
inter
alia,
information relating to the
identity of customers and suppliers of the company, the pricing
methods of the company, its trade connections,
its manufacturing
formulae and processes and its financial and marketing operations.
[14]
In January 2016, when promoted to the
position of Sales Director for DRC, Angola and Mozambique, the
Applicant and Vermaak entered
into a written agreement (the
commission agreement), which provided
inter
alia,
for a commission or bonus
structure in respect of Stratosat DRC, Stratosat Mozambique and
Stratosat Angola. In August 2017 the parties
signed an addendum to
the commission agreement whereby Vermaak’s territory was
increased to include West Africa.
[15]
The Applicant’s case is that its
business operates throughout the African market as satellite services
are preferred where
fibre and microwave infrastructures are not
readily available or as per the customer requirements and the
Applicant has sought
to protect its interests throughout the
continent by virtue of the restraint. Tinsky is based in Gauteng and
conducts business
in competition with the Applicant and Vermaak is
likely to seek business in Africa.
[16]
Vermaak has had access to and personally
nurtured many customer relationships over a period of employment with
the Applicant and
he managed
inter alia,
the following entities: Internet
Solutions, Mobax, Aucom, Multichoice, Startimes, QKon, Broadlink,
MST, IntelSat, Vodacom DRC, Castor
Networks DRC and all customers in
Mozambique. Vermaak also had access to confidential information.
[17]
The basis of this urgent application is the
breach of Vermaak’s restraint of trade undertakings by virtue
of his association
with Tinsky, registered to conduct business in
direct competition with the Applicant and by Vermaak unlawfully
approaching the
Applicant’s customers and suppliers.
The restraint of trade agreement
was superseded
[18]
Vermaak raised two issues in respect of the
restraint.
[19]
Firstly, that the restraint provisions were
only applicable at the time of his employment as a general / sales
manager and became
superseded by the subsequent commission agreements
whereby he was appointed as a director of the Applicant. Vermaak’s
case
is that when he was appointed as a director in January 2016, the
restraint entered into in January 2010 was executed. He was told
that
he was no longer an employee of the Applicant in the ordinary sense
and the scope of his work and responsibility changed drastically.
The
parties agreed that only the commission agreements would apply and
those agreements do not contain any restraint or confidentiality
provisions.
[20]
The Applicant disputed that the restraint
agreement only related to Vermaak’s position as general manager
and not as sales
director and that the restraint agreement was
novated by the subsequent commission agreements. Vermaak was promoted
to the position
of sales director, which entailed added
responsibilities but which is of no moment as the restraint agreement
was in respect of
his employment with the Applicant and was triggered
by the termination of his employment.
[21]
In
Bonfiglioli
SA (Pty) Ltd v Panaino
[1]
the
Labour Appeal Court (LAC) confirmed that a
contract in
restraint of trade is one that prevents an employee from exercising
his or her trade, profession or calling, or engaging
in the same
business venture as the employer for a specified period, and within a
specified area after leaving employment. The
restraint agreement is
therefore geared at protecting the employer's proprietary interest
after the employee has left the employer's
employment. The legitimate
object of a restraint is to protect the employer's goodwill and
customer connections (or trade secrets)
and the restraint accordingly
remains effective for a specified period (which must be reasonable)
after the employment relationship
has come to an end. The need for
the protection exists therefore independently of the manner in which
the contract of employment
is terminated.
[22]
If
in casu
Vermaak’s interpretation is
accepted, it would mean that the Applicant wanted to protect its
interest only during the period
that Vermaak was employed as sales
manager, whereas the need for protection arose by virtue of his
employment with the Applicant
and would in fact arose only after the
termination of employment. The restraint agreement would, on
Vermaak’s interpretation,
yield not only an insensible but also
an unbusinesslike result.
[23]
The restraint was entered into by virtue of
Vermaak’s employment and the knowledge he gained as a result of
that and was not
limited to his position of general / sales manager.
[24]
The restraint agreement remains applicable.
Limited terms of the restraint of
trade agreement
[25]
Secondly, and if the restraint agreement
the Applicant relies upon remained applicable, Vermaak’s
contention is that it is
taken entirely out of context.
[26]
Having found that the restraint agreement
entered into between the parties in January 2010 remains applicable,
the question that
leaps out is what was restrained and protected in
the said agreement.
[27]
In my view two main aspects were addressed
and agreed upon in the restraint agreement.
[28]
The first is contained in clause 1.1 –
1.3 of the restraint agreement, which deals with confidential
information and provided
that “during his employment with the
company he has had access to confidential information of the company
including, but
without being limited to, information relating to the
identity of customers and suppliers of the company, the pricing
methods of
the company, its trade connections, its manufacturing
formulae and processes and its financial and marketing operations.”
[29]
It is evident from the restraint agreement
that Vermaak is restrained, after the termination of his employment,
from divulging or
using any of the Applicant’s confidential
information. The terms of the restraint are clear on this aspect and
the Applicant’s
protection in this regard is not limited as it
provides for ‘any’ of the Applicant’s confidential
information.
[30]
The second aspect is provided for in clause
1.4 of the restraint agreement and it is the main issue in dispute.
It provides that:
‘
For
the protection of the business of the employer against the use by
anyone else of the confidential information the employee undertakes
that while he is employed by the employer and for a period of 2 years
after the termination of his employment with the employer
for any
reason whatsoever he will not, either for his own account or as an
employee, be a representative, contractor or employee
for Specialized
Turn Key Services (Pty) Ltd, Commsience (Pty) Ltd / Satellite 2000 or
any affiliate companies mutually or operated
by the same shareholders
or:
(a)
Carry
on or be engaged, interested or concerned, whether financially or
otherwise and whether directly or indirectly, in any business
carried
on at the date on which he ceased to be employed by any company or
person who operates in competition with the company
anywhere in
Africa, as specified in clause 1.4
(b)
Solicit
business from or canvass any person who was a customer of the company
at any time during the period of his employment with
the company.’
[31]
Vermaak’s case is that the relevant
restraint and confidentiality provisions in the restraint related to
a limited number
of entities only. Those are Specialized Turn Key
Services (Pty) Ltd, Commscience (Pty) Ltd, Satellite 2000 or any
affiliate companies
mutually owned or operated by the same
shareholders (collectively referred to as ‘the entities’).
Vermaak contended
that he is not involved in any of the aforesaid
entities thus he is not in breach of the restraint agreement.
[32]
The
Supreme Court of Appeal in
Natal
Joint Municipal Pension Fund v Endumeni Municipality
[2]
affirmed
the principles applicable to the interpretation of legislation and
contracts. What the judgment underscores is that the
exercise of
interpretation does not require a court to discern the intention of
the legislature or the parties to a contract
only by reference to
plain meaning of words with a deferential nod, if necessary, in the
direction of the
Oxford
English Dictionary
.
Wallis JA said the following at paragraph 18:
'The
present state of the law can be expressed as follows: interpretation
is the process of attributing meaning to the words used
in a
document, be it legislation, some other statutory instrument, or
contract, having regard to the context provided by reading
the
particular provision or provisions in the light of the document as a
whole and the circumstances attendant upon its coming
into existence.
Whatever the nature of the document, consideration must be given to
the language used in the light of the ordinary
rules of grammar and
syntax; the context in which the provision appears; the apparent
purpose to which it is directed and the material
known to those
responsible for its production. Where more than one meaning is
possible each possibility must be weighed in the
light of all these
factors. The process is objective, not subjective. A sensible
meaning is to be preferred to one that leads
to insensible or
unbusinesslike results or undermines the apparent purpose of the
document…. The "inevitable point
of departure is the
language of the provision itself" read in context and having
regard to the purpose of the provision and
the background to the
preparation and production of the document….' ‘
And further at paragraph 26:
'In
between these two extremes, in most cases the court is faced with two
or more possible meanings that are to a greater or lesser
degree
available on the language used. Here it is usually said that the
language is ambiguous although the only ambiguity
lies in
selecting the proper meaning (on which views may legitimately
differ). In resolving the problem, the apparent purpose of
the
provision and the context in which it occurs will be important guides
to the correct interpretation. An interpretation will
not be given
that leads to impractical, unbusinesslike or oppressive consequences
or that will stultify the broader operation of
the legislation or
contract under consideration.
'
[33]
In
Bothma-Batho
Transport (Edms) Bpk v S Bothma and Seun Transport (Edms) Bpk
[3]
the
Supreme Court of Appeal also considered the principles applicable to
the interpretation of legislation and contracts and held
that:
'Whilst
the starting point remains the words of the document, which are the
only relevant medium through which the parties have
expressed their
contractual intentions, the process of interpretation does not stop
at a perceived literal meaning of those words,
but considers them in
the light of all relevant and admissible context, including the
circumstances in which the document came
into being. The former
distinction between permissible background and surrounding
circumstances, never very clear, has fallen away.
Interpretation is
no longer a process that occurs in stages but is essentially one
unitary exercise.’
[34]
In interpreting the terms of the restraint
agreement, this Court should have regard to the
words
used, the context provided by reading the particular provision or
provisions in the light of the document as a whole and the
circumstances attendant upon its coming into existence.
[35]
In clause 3 of the preamble of the
restraint agreement some context is given to the agreement when it is
recorded that the Applicant
intended to enter into an agreement with
the entities and intended to second Vermaak’s services for use
by its competitor,
on certain terms and conditions. It was then
agreed between the parties that Vermaak would not divulge or use
confidential information
and that for the Applicant’s
protection, Vermaak would not for a period of two years after the
termination of his employment,
either for his own account or as an
employee, representative or contractor of any of the entities, carry
on or be engaged, interested
or concerned in any business carried on
by the specified entities in competition with the Applicant, anywhere
in Africa.
[36]
Applying the principles applicable to the
interpretation of contracts, clause 1.4. cannot and should not be
read, construed or considered
in isolation and the broader context of
the restraint should be considered as a whole. It is evident that the
restraint agreement
was entered into at a time when the Applicant
envisaged the secondment of Vermaak’s services to the entities,
who are competitors,
and sought protection of its business by
entering into the restraint agreement. No subsequent restraint
agreement was entered into
and at no point were the terms of clause
1.4 amended or expanded to include other entities or all competitors.
[37]
The protection the Applicant sought and
agreed upon with Vermaak, was in respect of the specified entities
and in my view the Applicant
is entitled to enforce its restraint in
respect of the specified entities.
[38]
Clause 1.4 of the restraint agreement
cannot be interpreted or understood to include all the entities the
Applicant has listed in
the application before me, as clause 1.4 is
qualified and refers to specific entities.
Breach
of the restraint of trade agreement
[39]
The next issue to be decided is whether
Vermaak has breached the restraint agreement.
[40]
The Applicant bears the onus of invoking
the contract and to establish that Vermaak has entered into the
contract which contained
the restraint and confidentiality
undertakings it seeks to enforce and to prove the breach thereof.
[41]
The Applicant seeks to enforce the
restraint agreement and in support of the alleged breach of the
restraint undertakings, made
several statements in its founding
affidavit to show that Vermaak
inter
alia,
provided quotations, contacted
clients to discuss business opportunities and required advice on how
to rectify an antenna issue.
Most of the averments however referred
to unidentified clients and unnamed entities. The Applicant did this
‘to protect the
very delicate relationship that it has with its
clients’ and because it ‘wished to guard against
embroiling its clients
in litigation.’
[42]
The Applicant cannot have its cake and eat
it. The Applicant seeks to enforce a restraint agreement, without
providing this Court
with all the information and where it did so, it
did so only because it ‘has been pressed on the issue’.
The Applicant
made allegations regarding its conclusions from
conversations with clients but provided no substantiating evidence or
documents
to support its allegations.
[43]
In the Applicant’s replying
affidavit, it made a with prejudice tender and as a compromise
indicated that it would agree to
an order which permits the
Respondents to sell box drop, anywhere in Africa, provided that the
Respondents do not, until 30 March
2019:
‘
i)
Offer any services in relation thereto including, but not limited to,
installation, commissioning, maintenance, support and network
monitoring and control; and
ii)
Buy from, or sell box drop to the Applicant’s suppliers and
customers, as the case may be, or otherwise deal with the
Applicant’s
suppliers and/or customers listed in annexure “X” until
30 March 2019.’
[44]
The Applicant stated that the aforesaid
tender sought to create space for Vermaak to continue making a living
selling box drop,
but in doing so, not to exploit the trade
connections and/or confidential information he had access to while in
the Applicant’s
employ.
[45]
Vermaak denies that he has breached the
restraint agreement, as the customers and suppliers listed in the
Applicant’s annexure
“X”, are not covered by the
restraint agreement.
[46]
In argument Mr Cook on behalf of Vermaak
indicated that Vermaak was prepared to accept paragraph i) of the
tender (as set out
supra
),
but for ENRC/ERG, with whom Vermaak has an existing contract in
place. Mr Cook submitted that there was no justification for
paragraph ii) of the tender as it prohibits Vermaak from buying from
or selling to entities in annexure “X”, when there
is no
exclusivity as those are the suppliers and customers in the market
and in an industry where price is king.
[47]
The parties filed further affidavits and
submissions in respect of annexure “X”. Those affidavits
and submissions however
did not change the fact that
in
terms of the restraint agreement, Vermaak would be restrained for a
period of two years after the termination of his employment
from
carrying on or being engaged, interested or concerned in any business
carried on by the specified entities in competition
with the
Applicant, anywhere in Africa. Annexure “X” contains a
list of 14 suppliers and 15 clients the Applicant seeks
to restrain
the Applicant from buying from, selling to or otherwise dealing with.
The entities specified in the restraint agreement
do not appear on
the annexure “X” list and
vice
versa.
[48]
Be that as it may, the Respondents rejected
the with prejudice tender.
The confidentiality undertakings
[49]
The Applicant seeks an order interdicting
and restraining Vermaak from divulging to any person any of the
Applicant’s confidential
information and using such information
for his own or any other party’s benefit.
[50]
I have already found that this part of the
restraint agreement is not limited to specified entities.
[51]
This relief sought is in accordance with
the terms of the restraint agreement where Vermaak undertook not to
divulge any of the
confidential information to any person whatsoever,
nor to use it for his own or anyone else’s benefit.
Confidential information
included, but without being limited to,
information relating to the identity of customers and suppliers of
the company, the pricing
methods of the company, its trade
connections, its manufacturing formulae and processes and its
financial and marketing operations.
[52]
In
Jonsson
Workwear (Pty) Ltd v Williamson and Another
[4]
the
Court held that:
‘
What
thus must now be done, as part of the value judgment to be exercised
in this matter, is to determine whether there is
a case made
out on the proper accepted facts as to whether the information the
first respondent had access to whilst employed with
the applicant
would fall within the parameters of what could be classified as
confidential information in terms of the above authorities,
and also
whether this information would be of benefit to the second respondent
as employer of the first respondent.’
[53]
The confidential information Vermaak has
had access to of which he has detailed knowledge and understanding of
include
inter alia,
cost
and pricing structure and strategy, supply chain and distribution
process, margins made on respective historic deals, sales
staff
commission structures, the abilities of the Applicant’s
technical team, the inter-company financial structures, loan
agreements, terms and the status thereof, inter-company transfer
pricing strategy, the company culture and the strong and weak
points
thereof and the Applicant’s customer base, their contact
details, office locations and the nature and terms of such
contracts.
This information remains commercially valuable for long periods of
time.
[54]
The Applicant’s case is that Vermaak
was a director and he had access to information which accompanied the
position. Vermaak
was privy to confidential information which he can
use to the detriment of the Applicant and he forged trade connections
which
he can exploit to the detriment of the Applicant.
[55]
Vermaak submitted that he was made to wipe
clean his computer and hard drive of any software and or company
information upon his
resignation and he disputed that he is in
possession of any confidential information. In respect of cost and
pricing structures,
Vermaak explained that those constantly fluctuate
and he is not vested with the Applicant’s or any of its
competitors discounting
structures. Vermaak is running a start-up
business, with no sales staff and any knowledge or understanding of
the Applicant’s
supply chain and distribution process,
commission structures, inter-company financial structures, abilities
of the technical team
and the Applicant’s culture serve no
purpose and are of no value to him in his one man show business.
Vermaak’s case
is that the Applicant failed to show that there
was anything worthy of protection.
[56]
The reality is that Vermaak has to show
that he did not have access to the Applicant’s confidential
information. Vermaak failed
to do so, instead his case is that the
Applicant’s confidential information is of no use to him.
[57]
I accept that Vermaak had access to
confidential information while in the Applicant’s employ and
whether he retained the information
or not, is not material. The fact
remains he had access to it. Vermaak has had access to information
which is not ordinarily known
by the Applicant’s competitors
and which could be of economic benefit to its competitors. This is
sufficient to enforce the
restraint in this regard.
[58]
Vermaak provided an explanation in respect
of every aspect of confidential information raised by the Applicant,
but he did not address
the issue of the Applicant’s customer
base. Even if I were to accept that the issues addressed
supra
are of no value to Vermaak and would
serve no purpose in his business, the same cannot be said about the
Applicant’s customer
base and trade connections.
[59]
Vermaak has had access to the Applicant’s
customer base, trade connections, pricing structures and other
confidential information
of which he gained knowledge while in the
employ of the Applicant. This information is indeed valuable and
worthy of protection,
as it could be used to the benefit of a
competitor and potentially exploited. The risk that Vermaak will
disclose or use confidential
information, is one the Applicant is not
required to run.
[60]
The Applicant is entitled to an order
enforcing the restraint agreement to the extent that its confidential
information is protected
and not infringed upon. In fact, Vermaak
undertook not to disclose or use the Applicant’s confidential
information, as defined
in the restraint agreement, and he is bound
by that undertaking.
The clause 1.4 restraint
undertakings
[61]
The Applicant seeks an order to interdict
and restrain Vermaak throughout Africa and until 30 September 2019
for his own account
or as an employee from carrying on or be engaged,
interested or concerned, whether directly or indirectly in the
business of Tinsky
and any business carried on in competition with
the business of the Applicant.
[62]
In my view the Applicant seeks to enforce
the restraint agreement far beyond its terms and contractual
undertakings. The Applicant
seeks relief from this Court where it is
unable to establish the terms it seeks to enforce, let alone a breach
of these restraint
undertakings.
[63]
Absent a clear restraint agreement in the
terms the Applicant seeks, this Court is in no position to grant the
relief sought. To
do otherwise would be to interfere in a free and
competitive market, without any contractual or legal basis to do so.
Costs
[64]
This Court has a broad discretion in
respect of costs. The Applicant was partially successful in this
application and the Respondents
were partially successful in
defending the relief sought.
[65]
In my view this is a case where the
interests of justice will be best served by making no order as to
costs.
[66] In the premises, I make the
following order:
Order
1.
The First Respondent is interdicted and
restrained from divulging to any person any of the Applicant’s
confidential information;
2.
The First Respondent is interdicted and
restrained from using any of the Applicant’s confidential
information for his own
or any other party’s benefit;
3.
There is no order as to costs.
______________
C. Prinsloo
Judge of the Labour Court of South
Africa
Appearances:
For the Applicant:
Advocate C Whitcutt SC with
Advocate C de Witt
Instructed by:
Eversheds Sutherland Attorneys
For the Respondents:
Advocate A Cook
Instructed by:
Aucamp Attorneys
[1]
(2015) 36
ILJ 947 (LAC).
[2]
2012 (4) SA
593 (SCA).
[3]
2012 (2)
ALL SA 517
(SCA) at para 12.
[4]
(2014) 35
ILJ 712 (LC) at para 49.