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[2026] ZAGPJHC 215
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A Plus Students (Pty) Ltd v Herbst (2024-027809) [2026] ZAGPJHC 215 (26 February 2026)
IN THE HIGH COURT OF
SOUTH AFRICA
GAUTENG LOCAL
DIVISION, JOHANNESBURG
Case Number:
2024-027809
(1)
REPORTABLE: YES / NO
(2)
OF INTEREST TO OTHER JUDGES: YES/NO
(3)
REVISED.
DATE
26 FEBRUARY 2026
SIGNATURE
In the matter between:
A
PLUS STUDENTS (PTY)
LTD
Applicant
(Registration number:
2014/074214/07)
and
AMANDA
HERBST
Respondent
Coram
:
B R Kahn AJ
Heard
:
31 October 2025
Judgment
Delivered
: 26 February 2026
JUDGMENT
B
R KAHN AJ
Introduction
1
1.1
If there is one constant on the calendars of the various divisions of
the High Court in South Africa, it is this; restraint of trade issues
will be ventilated on an ongoing and constant basis, and this
is one
of them.
1.2
The Applicant in this matter has sought interim relief in respect of
two
of its prayers (but without either the traditional part B of the
notice of motion and without the grant of same pending some or
other
future hearing for final relief) and final relief in respect of two
of its other prayers (a cease and desist order and payment
of certain
monies by way of pre-liquidated damages).
Relief
sought
2
To understand the observation referred to in paragraph 1.2 above,
it
is important that I quote the whole of the relief sought by the
Applicant, which I do hereunder:
‘
1
An interim interdict compelling the Respondent to immediately cease
operating Abagility Maths;
2
An interim interdict prohibiting the Respondent from using
confidential information
to which the Applicant has a proprietary
right and legal interest in, including but not limited to the
Applicant’s customer
client list;
3
An order that the Respondent immediately cease and desist from doing
business with,
approaching for business, or making contact with any
client from the Applicant’s customer client list;
4
A declaratory order that the Respondent pay the sum of R250 000.00
(Two Hundred
and Fifty Thousand Rand) as per clause 17.2 of the
Franchise Agreement, together with interest thereon at the legal rate
of 11.25%
a tempore morae’.
Background to the
Parties’ relationship
3
3.1
3.1.1
On 18 October 2014, the Applicant
(who claims to be the holder of
certain rights) entered into a franchise agreement with the
Respondent (the ‘Franchise Agreement’)
in terms of which
the Applicant asserted that it had ‘originated a business
system for the purposes of establishing and operating
various courses
in the use of Abacus and mental computation methods to teach the
skill of fast and accurate math calculation and
is the owner of
certain intellectual property rights used together with the business
system’ (clause 3 of the Franchise Agreement).
3.1.2
There is some reference in
the Franchise Agreement to the Respondent
acting on behalf of an entity to be registered but nothing further is
addressed by the
parties in this regard even though clause 4 of the
Franchise Agreement asserts (confusingly) that the Franchise
Agreement ‘is
with an (sic) corporate legal entity …….’.
3.1.3
Given that the parties do not
address same further in the papers
before the court (and it is not an issue in the proceedings) neither
shall I.
3.2
Clause 4 of the Franchise Agreement provides that the franchisee –
that is to say the Respondent – ‘desires to establish and
operate the business of teaching various courses and the
use of
abacus and mental computation methods to teach the skill of fast and
accurate math calculation and for this purpose to use
the
franchisor’s business system and intellectual property rights’.
3.3
In addition to the Franchise Agreement concluded between the
Applicant
and the Respondent (the Parties thereto) there was a
further agreement concluded between them headed ‘Memorandum of
Agreement’
and dated 26 October 2015 (‘the MoA’)
which provides in clause 2.5 thereof that the recipient (that is to
say the Respondent)
shall:
‘
2.5
‘not at any time use the confidential information to elicit or
entice a way or endeavour to elicit
or entice away any customers of
or employees of the discloser, either to join the recipient or for
any other purpose’ (the
discloser in this particular instance
being the Applicant);
3.4
The core of the restraint provisions is contained in three
sub-clauses
contained in clause 16 of the Franchise Agreement. It
emerges however from the papers and as confirmed by the Applicant’s
counsel during argument, that the Applicant was only relying on
clauses 16.1 and 16.3 of the Franchise Agreement, which I quote
hereunder:-
‘
16.1
Upon the termination of this agreement, the Franchisee will not gain
any monetary value from advising or teaching
math calculation methods
by means of the system of operating the product of education of
Japanese Soroban (Abacus) Mental Arithmetic
(the ‘Japanese
Model’), including the use of abacus and mental computation
methods to teach the skill of fast and accurate
math calculation, for
a period of thirty six (36) months after the termination of this
agreement, and for the Territory of South
Africa and SADC countries
as set out in 1.14.
16.3
The franchisee hereto undertake and agree, that it will not
participate, own, manage, either by agency, representation
or family
connections, compete with the franchisor in any manner or form
relating to a max educational entity irrespective of the
mythology or
any such like, pertaining to the training of individuals’.
4
4.1
Clause 16.1 quoted above is to be read together with the definition
of
‘Territory’ in clause 1.14 of the Franchise Agreement,
which is the Republic of South Africa and ‘SADC’,
(an
acronym for the Southern African Development Community) and because
the Territory plays such an important role in this application,
it is
as well that I identify the Territory by reference to the 16 member
states of SADC which are, in alphabetic order, Angola,
Botswana,
Comoros, Democratic Republic of Congo, Kingdom of Eswatini, Kingdom
of Lesotho, Madagascar, Malawi, Mauritius, Mozambique,
Namibia,
Seychelles, South Africa, United Republic of Tanzania, Zambia and
Zimbabwe, totalling (based on my own research) 11.2
million square
kilometres in area, with an estimated population of 340 million
people, that even the most generous of judges will,
I have no doubt,
consider somewhat excessive, if not absurd.
4.2
When I drew the above absurdity to counsel arguing the Applicant’s
position in this matter, she invited me to read down the Territory
and exercise my discretion in this regard. I deal more fully
herewith
later in this judgment.
4.3
4.3.1
It bears mention that (subject
to the observations referred to in
paragraph 4.3.2 hereunder) the restraint provisions relied upon by
the Applicant (which find
a home in the Franchise Agreement) do not
contain the severability provisions that one often sees in a
restraint agreement, the
purpose whereof is to allow a court (if it
is so minded) to – as the word ‘severability’
asserts – draw
down on one or other of the provisions (whether
with regard to period or territory – or perhaps both) when
judging the enforceability
or not of the restraint.
4.3.2
Clause 20.4 of the Franchise
Agreement beneath the sub-heading
‘severability’ reads as follows:
‘
All
the provisions of this agreement will be severable and no provision
will be affected by the invalidity of any other provision
of this
agreement’.
4.3.3
During argument when the topic
or subject of a possible drawdown was
addressed, the Applicant’s counsel made no reference to this
clause in the Franchise
Agreement – and correctly so, because
this severability clause does not apply to the situation in which
there is a drawdown,
but in circumstances where one clause (for
example, a consent to jurisdiction or the scope of the indemnity in
clause 10.16)
may be found to be invalid; that bad apple in the
bushel (ie, that one clause) will not taint (or invalidate) the other
apples
(ie,the remaining clauses).
4.4
I deal more fully herewith later in this judgment.
5
As invariably occurs before a party approaches a court to enforce
a
restraint provision, the Parties fell out and issues arose between
them. In this instance, the issues culminated in the termination
of
the Franchise Agreement, but whether the termination was for cause
(as the Applicant contends), or as a result of Applicant’s
repudiation (as the Respondent contends), is not relevant for the
purposes of this judgment. That the Franchise Agreement terminated
is
common cause.
6
The Applicant alleges that the Respondent is operating a competitive
business, Abagility Maths, in breach of the Franchise Agreement, and
in doing so the Respondent is (so the Applicant says) in breach
of:-
6.1
clauses 16.1 and 16.3 of the Franchise Agreement; and
6.2
clause 2.5 of the MoA.
7
The Applicant, concerned about the Respondent’s conduct,
addressed various demands to the Respondent which were primarily of a
cease-and-desist nature; the Respondent denied being in breach
of any
of her contractual obligations in favour of the Applicant and
consequently failed to cease or desist from what she was doing
or to
comply with any other demand made of her and so the scene was set for
litigation, which ultimately found a home in this application.
Legal
principles relating to interim and final relief
8
I mentioned in paragraph 1.2 above that the Applicant clearly
not
only sought interim relief (paragraphs 1 and 2 of the notice of
motion) but final relief (paragraphs 3 and 4 of the notice
of motion)
and all the reliefs sought by the Applicant relied on the same
factual matrix and allegations as set out in the founding
affidavit.
9
It is trite law that an Applicant seeking interim relief has
a
different onus to an Applicant seeking final relief.
10
In interim relief an Applicant has to establish that they have:
10.1
a prima face right to the requested protection;
10.2
an apprehension of irreparable harm should the relief not be granted;
10.3
indicated a balance of convenience – i.e., that the harm to be
suffered should the court
refuse the relief, outweighs the harm that
the other party will suffer if the relief is granted; and
10.4
no alternate satisfactory remedy.
11
In final relief however the Applicant needs to demonstrate:
11.1
that a clear – not just prima facie – right has been
established;
11.2
the injury complained of must be actually committed (and not
apprehended); and
11.3
the absence of any other satisfactory remedy.
Legal
principles to restraints of trade
12
Ever since
the decision in Magna Alloys & Research (S.A.) (Pty) Ltd v
Ellis
[1]
(‘Magna Alloys’)
which, put at its most simple, altered the law in South Africa in
regard to the enforceability (or
not) of restraints of trade, it is
trite that contracts in restraint of trade were no longer prima facie
contrary to public policy
and therefore invalid – which was
prior thereto and for decades – if not longer – the legal
position, but rather
were in general enforceable, unless to enforce
them would be unreasonable and therefore contrary to public policy.
13
Subsequent
to Magna Alloys, Didcott J succinctly set out the effect of the Magna
Alloys judgment in J Louw & Co (Pty) Ltd v
Richter &
Others
[2]
as follows:-
‘
Covenants
in restraint of trade are valid. Like all other contractual
stipulations, however, they are unenforceable when, and to
the extent
that, their enforcement would be contrary to public policy. It is
against public policy to enforce a covenant which
is unreasonable,
one which unreasonably restricts the covenantor’s freedom to
trade or to work. Insofar as it has that effect
the covenant will not
therefore be enforced. Whether it is indeed unreasonable must be
determined with reference to the circumstances
of the case.
Such circumstances are not limited to those that existed when the
Parties entered into the covenant. Account
must also be taken
of what has happened since then and, in particular, of the situation
prevailing at the time enforcement is sought.
Therefore, a party who
seeks to enforce a contract in restraint of trade must invoke the
contract and prove the breach thereof
thereafter, a Respondent who
seeks to avoid the restraint bears an onus to demonstrate, on a
balance of probabilities, that the
restraint agreement is
unenforceable because it is unreasonable’.
14
To
determine whether the restraint of trade is reasonable or not, the
court in the case of Basson v Chilwan and Os
[3]
enunciated four principles that must be applied:
14.1
does the one party have an interest that deserves protection after
termination of the agreement?;
14.2
if so, is that interest threatened by the other party?;
14.3
in that case, does such interest weigh qualitatively and quantitively
against the interest of
the other party not to be economically
inactive and unproductive?; and
14.4
is there an aspect of public policy having nothing to do with the
relationship between the parties
that requires the restraint be
maintained or rejected?
15
In some
instances, a fifth principle has also been recognised, namely: is the
restriction necessary to protect the applicant’s
interests, or
does it go further than is necessary to protect the applicant’s
interests?
[4]
16
In Basson v
Chilwan and Others
[5]
(a
judgment that is most helpful) it was stated:
‘
The
incidence of the onus in a case concerning the enforceability of a
contractual provision in restraint of trade does not appear
to me in
principle to entail any greater or more significant consequences that
in any other civil case in general. The effect of
it in practical
terms is this: the covenantee seeking to enforce the restraint need
do no more than to invoke the provisions of
the contract and prove
the breach; the covenantor seeking to avert enforcement is required
to prove on a preponderance of probability
that in all the
circumstances of the particular case it will be unreasonable to
enforce the restraint; if the court is unable to
make up its mind on
the point, the restraint will be enforced. The covenantor is burdened
with the onus because public policy requires
that people should be
bound by their contractual undertakings. The covenantor is not so
bound, however, if the restraint is unreasonable,
because public
policy discountenances unreasonable restrictions on people’s
freedom of trade …’
17
The
reasonableness of a restraint requires a court to make a valued
judgment. This judgment is premised on the factual matrix of
each
case as emerges from the papers. In Reddy v Siemens
Telecommunications (Pty) Ltd
[6]
,
the following was held:
‘
A
court must make a value judgment with two principal policy
considerations in mind determining the reasonableness of a restraint.
The first is that the public interest requires that parties should
comply with their contractual obligations, a notion expressed
by the maxim
pacta servanda sunt
. The second is that all
persons should in the interests of society be productive and be
permitted to engage in trade and commerce
or the professions. Both
considerations reflect not only common law but also constitutional
values. Contractual autonomy is part
of freedom informing the
constitutional value of dignity, and it is by entering into contracts
that an individual takes part in
economic life. In this sense,
freedom to contract is an integral part of the fundamental right
referred to in s 22. In applying
these two principal considerations,
the particular interest must be examined. A restraint would be
unenforceable it if prevents
a party after termination of her
employment from partaking in trade or commerce without a
corresponding interest of the other party
deserving of protection.
Such a restraint is not in the public interest. Moreover, a restraint
which is reasonable as between the
parties may for some other reason
be contrary to the public interest’.
18
Fundamental
to the Applicant’s right to relief is the requirement that it
demonstrates that it has an interest worthy of protection
[7]
.
19
The
reported judgment of Experia in South Africa (Pty) Ltd v Haynes
[8]
explains it thus:
‘
It
is well established that the proprietary interest that can be
protected by a restraint agreement, are essentially of two kinds,
namely: The first kind consists of the relationships with customers,
potential customers, suppliers and others that go to make
up what is
compendiously referred to as the ‘trade connection’ of
the business, being an important aspect of its incorporeal
property
known as goodwill. The second kind consists of all confidential
matter which is useful for the carrying on of the business
and which
could therefore be used by a competitor, if disclosed to him, to gain
a relative competitive advantage. Such confidential
material is
sometimes compendiously referred to as ‘trade secrets’.’
20
20.1
Applying that principle to the facts in this matter, the following
emerges; the Respondent is
not, as alleged by the Applicant,
operating a competitive business – whether under the name of
Abagility Maths or otherwise.
The Respondent is employed by her
husband in a business called Abagility Maths which, it would appear,
uses the Japanese Model,
although it is not clear at all from the
papers how and in what circumstances Abagility Maths (owned by the
Respondent’s
husband) acquired those rights.
20.2
In argument, the Applicant asserts that it is the same Japanese Model
as commercially exploited
by the Applicant, and assuming in favour of
the Applicant that it is, it follows therefore that the Applicant is
not the only person
which enjoys rights in South Africa from the
originator of the Japanese Model, in spite of creating the impression
in the founding
papers that she effectively had a form of
(contractual) monopoly within the Territory on the learning model
that was the subject
matter of the Franchise Agreement.
20.3
The Applicant, notwithstanding its protestations, does not however
make any effort – let
alone present any evidence – as to
the similarities (if any) of the learning methods that it, the
Applicant, commercially
exploits and the learning methods that
Abagility Maths commercially exploits. This omission – ie,
putting the court in the
position of being able to identify a
commonality of methodology (which would or should be the starting
point in the inquiry) is
missing. It is a major weakness in the
Applicant’s case.
21
21.1
I now deal with the question of the Applicant’s ‘confidential
information’
and ‘trade secrets’ (which for the
purpose of this judgment I will refer to collectively as the
‘Confidential
Information’). Besides simply asserting the
existence of Confidential Information (and an oblique reference to a
customer
list), there is a dearth of information as to what is the
Confidential Information claimed by the Applicant and how and in what
circumstances the Respondent is using and/or exploiting same –
even less so is there anything contained in the Applicant’s
founding papers as to how and if Abagility Maths is using and/or
misusing the Applicant’s Confidential Information.
21.2
In fact, there is no indication in the Applicant’s founding
papers as to what methodology
Abagility Maths employs and how it
unlawfully intrudes on and applies or exploits the Confidential
Information. A bald assertion
is insufficient – and yet the
Applicant appears to content itself with same.
22
22.1
The Applicant also alleges that the Respondent had ‘unlawfully
used the Applicant’s
customer list and contacted at least one
customer of the A Plus Students franchise in order to solicit and
entice such customer
away from the Applicant in order to take up
custom with the competitive business being run by the Respondent’.
22.2
The Respondent rebuts such allegation in some detail; it is clear
from the Respondent’s
answer that at no stage did she solicit
the Applicant’s customers (let alone the one person referred to
by the Applicant
in its founding papers), but over and above that,
there is a further compelling feature that mitigates against the
Applicant’s
claims and that is this; the Applicant is a
franchisor, not a franchisee and does not conduct the business of
teaching learners
mathematics to improve on what is seemingly a
notoriously difficult subject amongst South African learners.
22.3
The Applicant does not allege that it, itself, teaches the Japanese
Model or for that matter
whatever model over which it enjoys (at
least on the Applicant’s version) some form of proprietary
monopoly; on the contrary,
the Applicant is a franchisor and if I am
to accept that to be the case (and if I have regard to the former
relationship between
the Applicant and the Respondent evidenced by,
inter alia, the Franchise Agreement, I must accept this to be the
case) the Applicant
generates income by commercially exploiting
franchises, not by teaching mathematics lessons with whatever model
or tool it claims
to have devised and/or acquired.
23
23.1
In the Applicant’s replying affidavit there is the allegation
(for the first time) that
the Applicant has spent approximately 19
years and approximately R29 595 200.00 (a very
specific amount) to develop
the ‘niche teaching solutions and
methods’, but this assertion is not contained in the founding
papers and consequently
– at least for the purposes of this
application – I should not have regard thereto, but assuming
that I am wrong in
this regard (and I should have regard thereto)
there is no attempt by the Applicant to identify how the
extraordinarily large sum
averaging approximately R1 557 600.00
per annum (approximately R130 000.00 per month) has been
spent by the
Applicant in circumstances when, at least absent any
explanation, it makes no economic sense whatsoever.
23.2
In fact common sense dictates that it stretches credulity to believe
that this vast sum of money
was spent by the Applicant on a business
in which the origins or genesis of the teaching methodology emanates
from Japan (as opposed
to being developed by the Applicant itself),
but even if I am wrong in this regard and that the Confidential
Information and the
business model claimed by the Applicant is
completely homegrown, the same incredulity applies equally.
23.3
This conundrum has, I fear, been created by the Applicant itself. Who
owns the sole and exclusive
rights in the Territory to the Japanese
Model? The Applicant is silent in this regard but we do know that the
Respondent’s
husband – through Abagility Maths – is
operating the same or a substantially similar learning model to the
Japanese
Model (at least according to the Applicant) but given my
finding in regard to the lack of a protectable interest, I need not
dwell
thereon.
23.4
There is however one residual observation I should make; the
Applicant company was formed in
2014; it is not possible for the
Applicant to have spent some almost R30 000 000.00 (thirty
million rand) over 19 years
given that it has only been in existence
for 11 years, which raises questions as to the legitimacy and
veracity of the Applicant’s
allegations in this and other
respects and a propensity to exaggerate and/or mislead.
23.5
I should also mention that no attempt whatsoever is made by the
Applicant to give a breakdown
of how the sum of almost R30 000 000.00
(thirty million rand) has been expended nor to attach any annual
financial statements
in which this expenditure is recorded.
The
Applicant’s founding papers; the requirement for a complete and
substantiated case
24
In Select
PPE (Pty) Ltd v Ryan Holmes and Another
[9]
,
the Labour Court held that ‘the Applicant should make out a
complete and substantiated case in the founding affidavit why
it
believes the enforcement of the restraint would be reasonable, no
matter where the onus lies. If the Applicant fails to make
out a
proper case in the founding affidavit that the enforcement of the
restraint would be reasonable, it cannot remedy the failure
on reply
and then rely on the issue of onus as a basis to justify this’.
25
The High
Court in Fine and Country South Africa (Pty) Ltd v Tradelink
Properties (Pty) Ltd
[10]
and
in Airports Company of South Africa (SOC) Ltd v Tswelokgotso Trading
Enterprise CC
[11]
similarly
held that all the necessary allegations must be contained in the
Applicant’s founding papers, which must be self-contained.
26
This principle – the requirement that a litigant’s case
must be made
out in their founding papers – has been made clear
by our courts so often that it has become trite law and yet the
Applicant’s
founding papers are sparse in the extreme; the
threads are frayed and the fabric does not hold up. I have dealt
therewith in some
respects above and I also deal therewith more fully
hereunder.
Protectable
interests
27
I focus now on the protectable interests claimed by the Applicant
(which of course
the Applicant must claim in order to at very least
have a foot in the door) because absent a protectable interest, the
rest of
the Applicant’s case (such as it is), is doomed to
failure – and for reasons referred to hereunder (whether the
Applicant
is seeking an interim order or a final order) there is
simply no protectable interest identified by the Applicant in its
founding
papers but if I am wrong in this regard and there is a
shadow – or even something a little more than a shadow –
of
a protectable interest, the Respondent deals therewith clearly and
unambiguously which the Applicant avoids dealing with in its
reply.
28
28.1
As indicated above, the Territory within which the Respondent is
prohibited from conducting herself
in terms of the restraint,
comprises 11.2 million square kilometres with a population of over
300 000 000 persons.
28.2
There is no attempt by the Applicant to explain in its founding
affidavit why an imposition of
an area comprising the Territory
within which the Respondent is to be precluded from undertaking
certain activities, is reasonable
to protect its interests.
Recognising this difficulty, the Applicant invited me (through its
counsel during argument) to read down
the Territory and replace it in
my discretion (acting judiciously) with another (reduced) territory
that I might be inclined to
order, but this presents four
difficulties as I see it, being (in no order if importance) the
following:
28.2.1
firstly, and as pointed out in paragraph 4.3 above
of this judgement,
the Franchise Agreement (or at least the restraint component thereof)
has no severability provisions.
28.2.2
secondly, the question of a drawdown in relation to
the Territory is
not dealt with in the Applicant’s founding affidavit and
consequently, the Respondent is simply not able
to deal therewith –
other than to protest the Applicant’s request made during
argument;
28.2.3
thirdly, whether it is in the interests of justice
to reward the
Applicant (or any party who claims to be the beneficiary of a
restraint) who has sought to impose a patently (even
grossly)
unreasonable prohibition on a restrainee, the benefit of the court’s
intervention (even with an appropriate severability
provision) to
read down the original area / territory; and
28.2.4
fourthly, if it possible or judicious to do so, whether
a court is
able in the absence of evidence as to what would in the circumstances
be reasonable, to replace one territory / area
with another and so,
to use the old proverb ‘make a silk purse out of a sow’s
ear’ (this difficulty being linked
to that referred to in
paragraph 28.2.2 above).
28.3
In the Applicant’s founding papers, the Applicant stands fast
in seeking to prohibit the
Respondent from conducting herself in a
particular manner within the Territory; there was no attempt by the
Applicant to pause
and consider how irrational such a claim is and
recognising the irrationality, to then at least attempt (in its
founding papers)
to arm the court with information pertinent to what
the Applicant considers necessary (at least in relation to the
Territory) to
protect its interests, which would not only enable a
court to apply its mind to the possibility of a read down (assuming
this is
even possible without a severability clause) but of equal
(and perhaps greater) importance, to give the Respondent an
opportunity
of dealing therewith.
28.4
All the Applicant has done in this instance is, when I posed the
difficulty to Applicant’s
counsel, simply ask the court to
assist it with an alternate area / territory (ie, to read down) but
without any information necessary
to enable the court to do so.
29
29.1
In restraint matters where territory (or any area of prohibition)
plays a role, the restrainor
(or proposed restrainor) should, when
formulating the terms of the restraint (housed in a restraint
agreement), apply their minds
carefully to the nature of the
interests to be protected and how same may – applying
commercially reasonable safeguards and
appropriate checks and
balances – be achieved, and where they fail to do so (as in the
case of the current restraint provisions)
they must face the
consequences of their choice.
29.2
29.2.1
I would expect to read in founding papers where an
Applicant who
seeks to enforce a restraint that involves territory, to explain
(particularly where the territory appears –
at least prima
facie – to be excessive – perhaps even unreasonable) why
the territory provided for in the Franchise
Agreement is reasonable
in the circumstances and if an applicant (who conceivably may not
have been the author of the restraint
agreement and more particularly
the territory referred to therein) considers that perhaps, with
wisdom of hindsight or looking
at the particular facts as they have
unfolded in the matter (and whilst preparing their founding papers
and crafting the relief
they will seek), concludes that the territory
as identified is (perhaps in retrospect) unreasonable and that an
alternate or other
(lesser sized) territory is to be claimed as part
of the relief sought, to then provide therefore in the founding
papers and give
the court context – not only as to why the
territory embodied in the Franchise Agreement is perhaps / arguably
unreasonable,
but why another sized territory (clearly identified)
would in all the circumstances of the matter be reasonable (but then
of course
to identify what are the circumstances that underpin or
motivate that proposition so that the court can make an informed
decision)
and then invite the court to consider and to order a read
down of the territory as originally contracted for and replace same
with
another territory that is appropriate.
29.2.2
In addition thereto, a respondent in these circumstances
will then
have an opportunity of dealing with the Applicant’s case
insofar as a (proposed) read down of the contractual territory
plays
a role.
29.2.3
The Applicant has done none of the aforesaid.
29.3
It is trite that circumstances and criteria will differ from one
matter to another; much depends
on the nature of the activity to
which the restraint pertains, the nature of the business in which a
restrainor is seeking protection,
the nature, extent and severity of
the restrainee’s conduct, the economic environment within which
the parties conduct their
commercial activities, the source of the
Applicant’s income relating to the business in question, the
existence or not of
bespoke or Confidential Information, the client /
customer profile of the business whose interests are sought to be
protected,
as well as the client / customer profile of the
competitive business or activity, the catchment area of the
restrainor’s
(and even the restrainee’s) custom, the
nature and source of the restrainor’s (or the Applicant’s)
business’
goodwill, together with a myriad of other factors
that allow a court to have a good sense and understanding of the
restrainor’s
business activities, as well as the restrainee’s
business activities or other (allegedly) offensive / unlawful
activities
as may be alleged by an applicant – if any exist –
together with such other factors that will weigh on a court in
determining
whether it is able to come to the assistance of a
restrainor applicant and if so, on what basis. These are fact
specific. None
of these or other or similar facts are to be found in
the founding affidavit in this matter.
29.4
A perusal of the Franchise Agreement reveals the following:
29.4.1
the Respondent is to enjoy ‘use of Abacus and
mental
computation methods to teach the skill of fast and accurate math
calculation devised and originated by the franchisor and
recorded in
the operating manual, and includes any improvements or variations
made to the business system’ (clause 1.1 of
the Franchise
Agreement);
29.4.2
where, how and on what basis the use of the business
system is made
is not identified.
29.5
From where within the Territory the Respondent will actually make use
of the business systems
(presumably somewhere within an 11.2 million
square kilometre territory) is not referred to in the Franchise
Agreement. The Franchise
Agreement is silent in this regard – a
fundamental item of information that any court would require –
and nowhere in
the founding affidavit does the Applicant identify an
address from which Abagility Maths operates.
30
30.1
If a party’s position (maybe even a default position) is that
it will impose a prohibition
within a certain (exessive) area /
territory that will, even if found to be unreasonable, be read down
(not struck down)
by a court (i.e, to convert an unreasonable
territory to a reasonable territory), and so present a restrainor
(usually an applicant
in motion proceedings) with a type of safety
net, a court may end up inadvertently fostering a culture or attitude
that ….
‘I will ask for as much as I conceivably think I
can get – and maybe even not really apply my mind to the matter
–
and I will leave it to the court to read down from there and
so I will end up with something that I wanted anyway – or
something
close to it’.
30.2
Such an approach is unacceptable – made even more so because it
evidences an unthinking,
lazy and sloppy way of seeking to protect
interests (and simultaneously placing obligations on restrainees),
and it is not for
a court to intervene and, as I said earlier, reward
an applicant with something which is better than nothing. A court
cannot conjure
up out of thin air a territory (protectable interests
aside although all these factors are interwoven) that would in
certain (unidentified)
circumstances be reasonable.
30.3
30.3.1
In any event it seems to me that the persons who are
best qualified
to determine how to protect their interests are restrainors
themselves and if they cannot take the time or the trouble
to apply
their minds to the matter, I ask myself this question; why should a
court be placed in the difficult and onerous position
of converting a
restraint that is unenforceable (example the territory is completely
unreasonable) into one that is enforceable
(the territory is
reasonable) save in the rarest of circumstances – perhaps in
any circumstances?
30.3.2
Of course territory is but one of a number of factors
in determining
reasonableness; I simply use territory to make my point but the other
factors that need to be present can be used
by way of examples as
well.
30.3.3
If however I am wrong in taking this approach to the
matter and it
behoves a court to attempt to convert a frog into a prince (as it
were) the absence of any or sufficient information
to enable a court
to apply its mind to the matter puts an end to that possibility.
31
31.1
I must however make this clear lest I leave the wrong impression; a
court has, in the exercise
of their discretion and acting in the
interests of justice the ability to draw down on a territory (and
perhaps other features
of a restraint where the contract between the
parties envisages such a possibility) but it should do so sparingly,
only in appropriate
matters and never in my view without appropriate
and sufficient information (advanced by an applicant and dealt with
or not by
a respondent as it chooses) so as to make an informed and
fair decision.
31.2
It is so that many restrainors will apply their minds to what is a
reasonable territory (or for
example a reasonable period attached to
a restraint) in order to ensure that their contractual rights extend
no further than is
necessary to protect their interests, but in spite
of their best efforts in this regard, a court may not support that
argument,
but if in the founding papers sufficient information is
made available to enable the court not only to understand an
applicant’s
rationale, but to enable a respondent an adequate
and fair opportunity of rebutting or trying to rebut same, a court
should then
be possessed of sufficient information in respect of the
competing claims to enable it to venture into draw down territory but
absent that, there can in my view be no reward for a prima facie
unreasonable (and particularly a grossly unreasonable) restraint.
32
In this matter, the Applicant has – not surprisingly –
not explained
the basis for incorporating the Territory as defined in
the Franchise Agreement. The Applicant has not even taken the trouble
to
motivate or explain exactly why a reduced (read down) territory
might be reasonable (and what that reduced territory might actually
be) in all the circumstances. Nothing appears in the founding
affidavit as to, for example:-
32.1
the profile of the Applicant’s franchisee’s client base
(whether in general or in
particular in the case of the Respondent);
32.2
the typical catchment area for a franchisee’s client base
(whether in general or in particular
in the case of the Respondent);
as well as
32.3
that information to which there is reference in paragraph 29.3 above,
to
name a number of important features that a court would require to
enable it to apply its mind to a (possible) reading down.
33
Notwithstanding all my above concerns in relation to the Territory
and a possible
read down thereof, during argument I endeavoured to
understand more about the Respondent’s income generating
activity whilst
the Franchise Agreement was extant, and it would
appear that the Respondent relied for its income / custom on parents
of young
children who need assistance in math. It follows therefore
that a catchment area that might be appropriate would be within a
certain
number of kilometres of where the Respondent would have been
carrying on her business (where the learners attend for what I assume
to be extra lessons in mathematics) utilising the Applicant’s
business model but no such information has been tendered by
the
Applicant and the court is left in the dark. In addition thereto such
engagement from the bar is not on oath and is of no or
limited value.
The Respondent has not answered same anyhow and indeed has no
obligation so to do. I therefor cannot have any regard
thereto.
34
34.1
What however constitutes a final death-blow to the Applicant’s
prospects of success is
the Respondent’s assertions in
paragraph 2 (Caselines page 009 – 12) and paragraph 5
(Caselines page 009 – 13)
of the Respondent’s answering
affidavit in which she says in paragraph 2 that ‘the Applicant
had further closed down
the Meyerton branch’ (to which the
Applicant in her replying affidavit deals with obliquely and
evasively by stating that
‘save to deny that the content of the
answering affidavit is true and correct’, ‘or that any
hearsay evidence
ought to be admitted’ the remainder of these
paragraphs is noted.
34.2
What is it that is noted? That the Meyerton branch has closed down
and whilst the Respondent
does not deal with ‘the Meyerton
branch’ as clearly and succinctly as she could perhaps have
done (and to be clear,
if there is any obligation on one of the
parties to deal with the so-called ‘Meyerton branch’ –
whatever that
may be – it was the Applicant’s obligation
but yet it said nothing in regard thereto) it seems sufficiently
clear from
the papers as a whole that the Respondent was teaching the
Applicant’s methods at or through or via the Meyerton branch
(wherever
that was) and when I put this to Applicant’s counsel
enquiring what this meant, the Applicant’s counsel was (not
surprisingly)
unable to give me any finite – or for that matter
any approximate – idea as to what area or territory the
Meyerton
branch comprised;
34.3
In paragraph 5 of the Respondent’s answer she asserts that ‘the
Applicant does not
have a monopoly of math tutors
in the area
…..
(‘my emphasis’) – once again an
unidentified and undisclosed area and I do not believe that I can
assume that
it is the Meyerton area and even if I could assume it
were the Meyerton area I am not able to identify what this area
comprises;
is it a magisterial area, a municipal area, an area
identified by way of a radius and if so, what is the radius? five,
ten, 15
kilometres? and if so, what point is the centre of the radius
– or is it something else?
34.4
What also renders a (further) mortal wound to the Applicant’s
case was its concession during
argument that the Applicant does not
have a presence or another franchisee in the Meyerton area (I repeat;
whatever that area may
be) which confirms – if further
confirmation were required – that the Applicant does not have
an identifiable interest
worthy of protection which is being breached
or infringed by the Respondent.
35
The Respondent however having raised the matter would necessarily
have invited
the Applicant to reply thereto – to the extent
that the Applicant was not raising new matter – but in dealing
ad seriatim
with paragraphs 2 and 5 of the Respondent’s
answering affidavit (containing very significant and material
allegations), the
Applicant takes no issue therewith in its reply.
36
There is another feature that concerns – indeed disturbs me –
greatly
and that is this; there appear to be two systems alluded to
by the Applicant and there is confusion as to whether Abagility is
using:
36.1
the Japanese Soroban model / method; or
36.2
the Applicant’s system which it alleges to have developed over
19 years and spending almost
R30 000 000.00 in the process,
to
teach mathematical arithmetic and exactly what Abagility is doing and
by extension what the Respondent is doing in working for
Abagility.
There are vague assertions of confidentiality (broad outline) but
nothing specific, but by virtue of my finding in regard
to the
Applicant not having an interest worthy of protection, I need not
make a finding in this regard.
37
All the above is, in my view, fatal to the Applicant’s case;
its founding
papers are sparce and the Applicant seemed to be content
to make bald allegations in the (wrong) belief that on some or other
basis
– and without further ado – they would suffice for
the purposes of relief in motion proceedings.
38
Against the aforesaid backdrop and in all the circumstances, I
consequently find
that the Applicant has not identified an interest
worthy of protection, and so must fail in its efforts to obtain the
relief sought.
39
39.1
Having found that the Applicant has not established an interest
worthy of protection this would
be the end of the matter but there is
another feature that I should deal with and that is this; the manner
in which the Applicant
has couched the relief she has sought.
39.2
The Applicant seeks interim interdicts in respect of prayers 1 and 2,
but there is no reference
whatsoever to those interim interdicts (if
granted) being granted pending some other determination (often a part
B in the notice
of motion for final relief or even the outcome of an
action to be instituted) and so the two reliefs sought in prayers 1
and 2
are in any event incompetent.
39.3
Whilst the failure to incorporate some future final relief in the
notice of motion would not
necessarily have been fatal had the
founding affidavit dealt clearly therewith, the founding affidavit
too is silent in this regard.
Consequently, the relief sought in
prayers 1 and 2 cannot be granted anyway.
40
Insofar as the relief sought in prayers 3 and 4 are concerned same
would be dependent
upon the Applicant having established, inter alia,
an interest worthy of protection. The Applicant has not, and so these
two prayers
too must fail.
41
I also remain cognisant of the Respondent’s constitutional
right to freedom
of trade and occupation as entrenched in s 3 of the
Constitution of the Republic of South Africa, 1996, but given what is
referred
to above I need not linger in regard to this constitutional
imperative as to how it might impact, or might have impacted, on the
Applicant’s case.
42
All in all the whole of the Applicant’s cause of action –
at least
as presented – was misconceived and incapable of
judicial support.
Order
43
The following order is therefore made:-
43.1
the application is dismissed;
43.2
the Applicant is ordered to pay the Respondent’s costs
including costs of counsel on scale
B.
B R KAHN AJ
Judge of the High Court
Johannesburg
Counsel for the
Applicant:
Advocate JA Booyse
Email:
kevind@kisch-ip.com
Email:
raeesaht@kisch-ip.com
Instructed
by: KISCH Africa Inc.
Counsel for Respondent:
Advocate
Thelma Heyns
Email:
litigation@roosinc.com
Email:
alta@roosinc.com
Instructed
by: Alta Roos Inc.
[1]
[1984] ZASCA 116
[2]
[1987] (2) SA 232
(N)
[3]
[1993] ZASCA 61
[4]
Kwik
Kopy (SA) (Pty) Ltd v Van Haarlem and Another
1999
(1) SA 472
(W)
[5]
Supra 3 at para 2
[6]
Reddy
v Siemens Telcommunications (Pty) Ltd (251/06) [2006] ZASCA 135
[7]
Supra 3
[8]
[2012] ZAGPJHC 105 and
Sibex
Engineering Services (Pty) Ltd v Van Wyk and Another
1991
(2) SA 482
(T)
[9]
[2024] ZALCJHB 484 at para 41
[10]
[2024] ZAGPJHC 586
[11]
[2022] ZAGPJHC 410