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[2018] ZALCD 10
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EMD Technologies (Pty) Limited v Soni (D769/18) [2018] ZALCD 10 (1 August 2018)
IN
THE LABOUR COURT OF SOUTH AFRICA,
DURBAN
Not
Reportable
Not
of interest to other judges
Case
no: D 769/18
In the
matter between
EMD
TECHNOLOGIES (PTY)
LIMITED
Applicant
and
MINAL
VASANTHRAI
SONI
First Respondent
VISISO
ADVISORY SOLUTIONS (PTY)
LIMITED
Third Respondent
MOTION
CAPITAL (PTY)
LIMITED
Fourth Respondent
Heard:
15 June 2018
Delivered:
15 June 2018
Edited:
1 August 2018
Summary:
Restraint of trade –
whether an agreement was concluded
EX
TEMPORE
JUDGMENT
COETZEE
AJ
[1] This
is the
ex tempore
judgment in the matter of EMD Technologies
(Pty) Limited, the applicant and Minal Vasanthrai Soni the first
respondent, Visiso
Advisory Solutions (Pty) Limited, third respondent
and Motion Capital (Pty) Limited, the fourth respondent.
[2] In
this matter the applicant on an urgent basis seeks to interdict and
restrain the first respondent until 15 March 2023 in
all areas in
which the applicant operates in the Republic of South Africa from
using and disclosing confidential information carrying
on or being
interested in a competitor of the business of the applicant or
rendering services to any business similar to or endeavouring
to
compete with that of the applicant and not to encourage or entice the
applicants’ employees to be employed by the first
respondent.
It has settled with the second respondent and it asks for no relief
against the third and fourth respondents. I refer
to the parties as
the employer and the employee.
[3]
Before I dealt with the application itself I raised with the parties
the state of the Court file. By 12 June 2018, three days
before the
hearing, the court file had not been paginated or indexed, only some
of the documents were indexed. On 13 June 2018
my preparation was
interrupted for purposes of getting the file in order.
[4] On 13
June 2018 the file was returned with the following challenges:
Firstly, the answering affidavit was not added to and bound
to the
paginated documents. The loose copy of the answering affidavit was
not paginated and still has not been paginated or added
to the
papers.
[5] The
answering affidavit is referred to in the index but not placed and
bound with the documents. The confirmatory affidavit
of Katwa is
referred to in the index but not added to the paginated and bound
documents. It has still not been paginated by the
parties, I
paginated it.
[6] On 13
June 2018 the applicant’s heads prepared for the undefended
application that was set down for 17 April 2018 was
the only attempt
at filing heads. The first respondent’s heads were delivered on
13 June 2018. The applicant filed
supplementary heads with the
court on 14 June 2018. On 13 June an application for condonation for
the late filing of the answering
affidavit and an objection thereto
were filed.
[7] I
required the parties to address me on the consequences of the above
state of affairs and why the Court should hear the matter
today.
It was clear to me that this matter might not have been ripe for
hearing as the practice manual have in various respects
not been
followed. I was urged to hear the matter because it was an
urgent matter.
[8]
Urgency does not extend to where parties have at least 10 or 12 days
in which to get the file in order, to file heads and to
prepare in
such a way that this Court is able to deal with the matter. The
parties addressed the Court, apologised and urged
the Court to hear
the matter. I have decided to hear the matter nonetheless.
[9]
Firstly, there was an application for condonation for the late filing
of the answering affidavit. The first respondent applied
for
condonation for the late filing of his answering affidavit. The
answering affidavit was filed outside the period granted by
the Court
in terms of an agreed order of 17 April 2018.
[10] The
delay is approximately 12 days. In my view it is not an excessive
delay having regard to the time periods in this matter.
The
explanation of the first respondent is that because the applicant did
not pay the first respondent’s salary for March
2018 for that
part of the month that he worked until the date of his resignation,
he was unable to instruct his legal representative
until he procured
finance and that took some time.
[11] This
was challenged by the applicant on the basis that he did not add
supporting confirmatory affidavits or explain from whom
and how and
when he succeeded in borrowing money. This is not decisive in this
matter as the first respondent's financial position
is known to him.
[12 I
find the explanation acceptable for purposes of granting condonation
for the late filing of the answering affidavit.
[13] As
far as the prospects of success are concerned, although no specific
mention thereof is made in the application, by this
is an urgent
matter the contents of the answering affidavit sets out the defence
of the first respondent. His defences are that
he did not sign the
restraint of trade agreement (referred to as the MOU) and that he in
any event did not intend to or has commenced
doing business in
competition with the core business of the applicant.
[14] In
short, if he could show for purposes of condonation that he did not
sign the MOU and did not intend to do business that
is in competition
with that of the applicant (if he signed the MOU) or enticing the
employees then he has sufficient prospects
of success for purposes of
the condonation application.
[15] As
to prejudice to the applicant it submits that it had to file a second
replying affidavit thereby incurring further costs
and it caused a
delay to the applicant in preparing its heads of argument.
[16] The
applicant, however, was in possession of the answering affidavit from
18 May 2018 and filed its second replying affidavit
on 1 June 2018.
That left the applicant with 15 days until the date of the trial.
This is not prejudice that cannot be cured by
a cost order.
[17] The
late filing of the answering affidavit is condoned, and the first
respondent is ordered to pay the wasted costs occasioned
by the delay
in filing the answering affidavit.
[18] In
my view the opposition to the application for condonation is
unreasonable and costs should follow the result. The
applicant
is ordered to pay the costs of opposition to the application for
condonation.
[19] I
requested the parties to first address me on the memorandum of
understanding (the MOU) which forms the basis of the relief
that the
applicant seeks against the first respondent. It is referred to
as a memorandum of understanding and it contains
restraint
provisions. The applicant relies upon those restraint provisions when
it asks for a final interdict.
[20] In
the founding affidavit it relied on a signed agreement that was
signed. In response to the answering affidavit the applicant
extended
the basis for its relief to an agreement that was agreed to even if
it was not signed. In other words, so goes the submission,
it was a
collective effort that led to a document that the first respondent
understood to be binding upon him.
[21] The
first respondent contends that the applicant is restricted to what it
said in its founding affidavit. If it wanted to extend
the cause of
action then it had to file a supplementary affidavit or introduced
this ground in such a manner that the first respondent
had an
opportunity to deal with it, either in the answering affidavit or in
a second supplementary answering affidavit.
[22] The
applicant is required to prove a signed agreement binding upon the
employee. It cannot in its replying affidavit introduce
a new basis
as it attempted to do.
[23] The
applicant contends that the first respondent signed the MOU and/or
agreed to it. The first respondent denies that he signed
it or that
he agreed to it.
[24] The
Court has been referred to various facts, circumstances and the
probabilities in determining whether it is possible to
resolve the
dispute between the two versions. The two versions are that the MOU
upon which the applicant relies as having been
signed and the second
version which is the denial by the employee.
[25] The
following are relevant factors either one way or the other.
[26] It
is common cause that the employee initialled every page of the MOU;
this favours the version of the applicant.
[27] On
the last page there is a line designated for the signature of the
person whose name is printed below the line. The printed
name below
the line is that of the employee. Below that is a space for a name
and below that space for a date. In the space for
the name there
appears in handwriting the printed name of the employee. This,
according to the applicant, is the "signature"
of the
employee.
Ex facie
the document a name was placed in the space
designated for a name. The space where the first respondent was
supposed to sign does
not carry any signature. The first respondent
says it is because he did not sign the MOU. This favours his
version.
[28] The
applicant’s director and the applicant’s attorney, Ms
Moni, with the first respondent and his wife were present
when the
first respondent appended his name to the last page. This may not be
quite correct as on the version of the first respondent
the director
placed his signature on the document, turned and left.
[29]
Assuming that all of them were there when he placed his name on the
MOU, then according to the director and Ms Moni he never
indicated to
them that he was not agreeing to the contents of the MOU. According
to them in the end he picked up the document,
looked at it and
indicated that he was satisfied with the document. This favours the
applicant’s version that he might have
agreed to the document
but not that he signed it.
[30] The
applicant had its attorney present at the meeting of 15 March when
the MOU was discussed. The first respondent says he
was ambushed. On
the facts that seems to be the position. He was called to a meeting
and then the applicant asked its attorney
who was present to sit in
and go through the MOU that was pre-prepared for the applicant.
[31] It
is surprising that the applicant's attorney did not explain to the
first respondent to sign the agreement where they made
provision for
such a signature and to append his signature instead of writing his
name in print where there is space for the identification
of a name.
According to the papers she explained the whole document to him, but
she failed to explain to him where to sign. This
counts in favour of
the employee's version.
[32] The
applicant relies upon a WhatsApp in which the first respondent said
he could sign anything, to show what his state of mind
was, that is
that, he would sign the MOU and in fact therefore signed it.
Having regard to contents of the WhatsApp it merely
says that he was
not going to compete regarding the software programme of the
applicant and that he would sign anything to that
effect. This does
not assist the applicant but rather favours the version of the first
respondent.
[33] It
is also clear that when push came to shove he did not just sign
anything presented to him. This supports the contents of
the WhatsApp
that he was prepared to sign anything to show that the software
programme would not be competed with. It is apparent
from the papers
that, the software programme of the applicant is a core part of the
applicant’s business.
[34] The
applicant submits that, it is indicative of the fact that the first
respondent agreed to the MOU that there was no further
correspondence
from the first respondent’s attorney regarding the MOU after 15
March 2018. This seems to me to be a neutral
factor as his attorney
would have to take her instructions from the first respondent. There
was no obligation upon her to return
to or correspond with anybody on
behalf of the employee unless instructed to. She had one telephone
call with the attorney for
the applicant during the discussions and
she sent one email and thereafter the communication was between the
first respondent and
the applicant’s representatives.
[35] What
is also clear is that in the email the first respondent's attorney
clearly said that she could not comment in such short
time on the
pre-prepared MOU. She referred to quite a substantial number of
issues and amongst others included four items that
she identified
that had to be included in the agreement. Those issues are not
included in the agreement. The email with the comments
was sent to Ms
Moni, the applicant's attorney who was present at the discussions.
The omission of the four items from the MOU counts
against the
applicant’s version.
[36] The
first respondent denies that by writing his name in his handwriting
in the space for the name of the person to sign he
thereby signed the
MOU. This favours his version.
[37] The
first respondent contends that the five-year period and the
geographical area mentioned in the MOU are unfair and that
he was
advised by his attorney not to sign and agree thereto. In the end he
decided not to sign and not to agree to the document
unless he had
the opportunity to have his attorney looking at it with sufficient
time to comment. This favours the first respondent's
version.
[38] The
first respondent explains his initials to the various pages in that
he was requested to agree to the changes on those pages.
[39] The
first respondent’s attorney filed a confirmatory affidavit
confirming the first respondent's version. She also referred
to a
telephone call between them while she was in her car and when the
first respondent had left the meeting. She sets out in some
detail
what occurred and the last paragraph, paragraph 11 reads as follows:
“
I
recall that I later received a further telephone call whilst I was
driving. I recall that the first respondent advised that
the
meeting was concluded and referred to the agreement.”
[40] The
applicant submits that the reference in paragraph 11 to "agreement"
means that this paragraph should be interpreted
to confirm that the
first respondent informed her that he had agreed to the MOU and that
there was an agreement. I find no support
for this contention in this
paragraph. She throughout her affidavit refers to the document as
"the agreement" or the
"MOU". At least a number
of times she referred to "the agreement". The first
reference an agreement is even
before the anything has been changed
on the MOU. This does not favour the version of the applicant.
[41]
There clearly is a dispute of fact as to whether the MOU was signed
by the first respondent. Some of the probabilities favour
the
applicant's version and others favour the first respondent's version.
[42]
In my view I cannot resolve the
dispute of fact on the probabilities. There are too many
probabilities that favour either the one
version or the other. None
of them are decisive. I therefore apply the principles in
Plascon-Evans
[1]
and the
Stellenbosch
-case.
[2]
[43]
According to those authorities the respondents’ version must be
real, genuine or
bona fide
, in other words it should not be
fanciful or without any foundation. His version may well be genuine
and
bona fide
. The applicant has not gone that far as to say
that the first respondent is
mala fides
. On that basis I
cannot reject the version of the first respondent that he did not
sign the MOU. This would have been a proper
case to refer to evidence
but none of the parties requested that.
[44] The
applicant must show that the agreement upon which it relies is
binding. In this case the dispute was exactly as to whether
the
agreement was signed. The “signature” is in dispute. The
onus rests with the applicant to prove that the MOU was
signed by the
first respondent.
[45] The
applicant has not discharged the onus to show the MOU was signed and
that the first respondent is bound by the MOU.
Costs
[46] The
first respondent was successful. There is no reason why costs should
not follow the result.
[47]
Under the circumstances I make the following order:
[47.1]
The late filing of the answering affidavit is condoned, and the
applicant is ordered to pay
the cost of the opposition to the
application.
[47.2]
The first respondent is ordered to pay the wasted costs occasioned by
the late filing of his
answering affidavit.
[47.3]
The application is dismissed with costs.
_____________________
F
Coetzee
Acting
Judge of the Labour Court
APPEARANCES:
For the
applicants:
Adv S Swartz
Instructed
by:
Moni Attorneys Inc
For the
first respondent:
Adv S K Dayal
Instructed
by:
Maharaj Attorneys
[1]
Plascon-Evans Paints Ltd v
Van Riebeeck Paints
(Pty)
Ltd [1984] 2 All SA 366 (A)
[2]
Stellenbosch Farmers'
Winery v Stellenvale Winery (Pty) Ltd
1957 19871 (4) SA 234
(C)