Summary of Judgment

1. Introduction

This judgment concerns an urgent application for leave to appeal in the Labour Court. The applicant, Labournet (Pty) Ltd, sought leave to appeal against two earlier orders made by the same court: an order dismissing Labournet’s application to enforce a restraint of trade against the first respondent (Ms Elsa Thutuka Mohale) and a limited costs order.

The second respondent was V3 Consulting Engineers (Pty) Ltd. The judgment indicates that the court received written submissions from both sides and determined the application in chambers. The application for leave to appeal was filed on 7 January 2026, and judgment was delivered on 19 January 2026.

The general subject-matter of the dispute is the enforcement of a restraint of trade following the first respondent’s departure from the applicant, and, in the leave-to-appeal proceedings, the related question whether the court’s approach to onus and protectable interests in restraint litigation justified appellate reconsideration. A further issue concerned whether the costs order warranted interference on appeal.

2. Material Facts

The court treated it as common cause for purposes of the leave-to-appeal enquiry that the underlying proceedings were a restraint-of-trade enforcement application and that the applicant’s case in those proceedings proceeded on the basis that a restraint existed and had been breached.

A procedural fact relied upon by the court in this leave-to-appeal judgment was that the answering affidavit had been struck out for lateness in the main proceedings. Labournet relied heavily on this procedural posture to argue that there was no justification before the court to resist enforcement of the restraint.

The decisive factual finding from the main order, as referenced in this judgment, was that Labournet failed to establish an interest worthy of protection. The leave-to-appeal judgment did not revisit the evidentiary detail underlying that finding; instead, it treated that finding as central to evaluating whether the court’s approach disclosed an appealable error.

3. Legal Issues

The central legal questions were whether Labournet had established grounds for leave to appeal against the main order and the costs order, in particular whether the court had erred in its approach to onus in restraint-of-trade matters after striking the answering affidavit.

The dispute was primarily concerned with the application of legal principles to the procedural and factual posture of the case: whether, in the absence of an answering affidavit, the court was nonetheless required to scrutinise the founding papers to determine whether a protectable interest had been established, or whether enforcement should have followed automatically once existence and breach of the restraint were asserted as undisputed.

A secondary issue concerned a discretionary value judgment: whether the limited costs order reflected a misdirection justifying appellate interference, given that costs are generally a matter for the court’s discretion.

4. Court’s Reasoning

The court addressed Labournet’s principal contention that restraint-of-trade litigation involves a strict “onus-shifting” sequence, namely that once an employer proves the existence of a restraint and breach, the burden shifts to the employee to prove unreasonableness. Labournet argued that, because the answering affidavit was struck out, there was no factual basis upon which unreasonableness could be established, and the restraint therefore had to be enforced.

The court rejected the proposition that the enquiry can be reduced to a mechanical onus shift that compels enforcement merely because the founding affidavit is unopposed. It held that more recent authority, particularly Jankielson (LAC) as relied upon by the court, requires an interrogation of the applicant’s own papers before a restraint is enforced. The court emphasised that where the facts in the founding affidavit do not disclose protectable interests, the enquiry does not proceed to the subsequent stage of balancing competing interests. On that approach, the absence of an answering affidavit does not cure deficiencies in an applicant’s case on protectable interest.

In dealing with the authorities cited by Labournet, the court distinguished them on the basis that they involved circumstances where the courts considered the applicant to have established an interest worthy of protection, and where the respondent then failed to demonstrate unreasonableness. By contrast, the key feature of the present matter, as the court put it, was that the court had found that Labournet did not establish a protectable interest in the first place, which meant Labournet’s reliance on an unopposed posture could not succeed.

The court further considered that its approach aligned with the broader procedural principle that a court should not merely “rubberstamp” relief in motion proceedings, even when unopposed. By reference to authority dealing with default-type relief, the court reasoned that courts have a duty to examine whether the relief sought is justified in law. The court regarded restraint enforcement as comparable, in the sense that it implicates a clash between private contractual enforcement and public policy considerations, thereby underscoring the need for judicial scrutiny of an applicant’s case.

Applying these principles to the leave-to-appeal test, the court concluded that Labournet had not demonstrated that another court would reach a different conclusion, and found no other compelling basis to grant leave to appeal on the merits.

On the costs order, the court reasoned that costs are an exercise of judicial discretion. It held that the limited costs award could not be characterised as an error merely because a different outcome on costs occurred in another case. The court stressed that discretionary decisions are not governed by drawing direct equivalences between cases, because that would undermine the nature of discretion. The court therefore found no basis to grant leave to appeal against the costs order.

Finally, the court noted that the respondents sought a punitive costs order in the leave-to-appeal proceedings but did not motivate it, and this formed part of the context for the eventual costs disposition in the leave-to-appeal application.

5. Outcome and Relief

The court dismissed the application for leave to appeal in its entirety, including leave to appeal against both the main order dismissing enforcement of the restraint and the limited costs order.

The court made no order as to costs in the leave-to-appeal proceedings.

Cases Cited

A J Charnaud & Co (Pty) Ltd v van der Merwe and Others (2020) 41 ILJ 1661 (LC).

Service Parts Logistics (Pty) Ltd v Mshengu (2020) 41 ILJ 1762 (LC).

Sadan and Another v Workforce Staffing (Pty) Ltd (2023) 44 ILJ 2506 (LAC).

Beedle v Slo-Jo Innovations Hub (Pty) Ltd (2023) 44 ILJ 2493 (LAC).

Jankielson (Labour Appeal Court) (January 2017) (full citation not provided in the judgment).

Reddy v Siemens Telecommunications (Pty) Ltd (Supreme Court of Appeal) (full citation not provided in the judgment).

Truworths Limited v Nxasana, Mr Price Group Limited and Another (2025/176724) [2025] ZAWCHC 580 (10 December 2025).

Sunset Ridge Estate Home-Owners Association v Van Deventer and Others (035234/2022) [2024] ZAGPPHC 220 (5 February 2024) (unreported).

Legislation Cited

No legislation was cited in the judgment.

Rules of Court Cited

No rules of court were cited in the judgment.

Held

The Labour Court held that Labournet did not establish grounds for leave to appeal because, even where an answering affidavit is struck out and the matter is effectively unopposed, the court must still scrutinise the founding papers to determine whether the applicant has established a protectable interest justifying enforcement of a restraint of trade. Since the court’s main-order finding was that Labournet failed to establish such an interest, Labournet did not show that another court would reach a different conclusion or that any other compelling reason justified an appeal.

The court further held that the limited costs order was a discretionary decision and that Labournet had not established an appealable misdirection in that discretion. The application for leave to appeal was dismissed, with no costs order.

LEGAL PRINCIPLES

A court considering enforcement of a restraint of trade is required to interrogate the applicant’s founding papers and is not compelled to enforce a restraint merely because the respondent’s answering affidavit is absent or struck out. The absence of opposition does not relieve an applicant of the obligation to place before court facts establishing the legal basis for the relief sought.

In restraint-of-trade matters, the applicant must establish, on its own papers, the existence of a protectable interest. Where the founding affidavit does not disclose such an interest, the enquiry does not proceed to a further qualitative and quantitative weighing of competing interests.

Costs orders are generally matters of judicial discretion, and an alleged inconsistency with costs outcomes in other cases does not, without more, demonstrate an improper exercise of discretion warranting appellate interference.