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[2026] ZAGPPHC 532
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Equity Medical Technologies (Pty) Limited v De Villiers and Another (2026-078818) [2026] ZAGPPHC 532 (4 June 2026)
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REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION,
PRETORIA
CASE
NO: 2026-078818
(1)
REPORTABLE:
YES
/NO
(2)
OF INTEREST TO OTHER JUDGES:
YES
/NO
(3)
REVISED:
YES
/NO
DATE 04/06/2026
SIGNATURE
In
the matter between:
EQUITY
MEDICAL TECHNOLOGIES (PTY) LIMITED
Applicant
and
FRANCOIS
DE VILLIERS
First
Respondent
GENVIA
SA (PTY) LIMITED
Second
Respondent
JUDGMENT
MBONGWE,
J:
INTRODUCTION
[1]
The applicant seeks to enforce a restraint of trade and
confidentiality undertakings against the first
respondent, Mr De
Villiers, following his resignation and subsequent employment with
Genadyne and/or Genvia SA, a competitor of
the applicant. The relief
sought is final in nature, extending until 26 January 2027, twelve
months post termination of employment.
[2]
The first respondent resists enforcement, contending that the
applicant’s proprietary interests
have dissipated following the
termination of its distribution agreement with Genadyne, and that any
restraint beyond 1 July 2026
is punitive, contrary to public policy,
and unsupported by legitimate interests.
THE
APPLICABLE PRINCIPLES
[3]
Covenants in restraint of trade are valid and enforceable unless
shown to be unreasonable.
[1]
The
test remains whether the restraint protects a legally recognisable
interest of the employer, such as confidential information
or
customer connections, rather than merely excluding competition.
[2]
[4]
The balancing exercise requires
consideration of:
a)
whether the applicant has a protectable interest,
b)
whether such interest is threatened,
c)
whether the interest outweighs the respondent’s right to work,
and
d)
whether
public policy supports enforcement.
[3]
[5]
The enquiry is conducted at the time enforcement is sought, not at
the time of the conclusion of the
contract.
[4]
CONFLICTING
CONTENTIONS
[6]
The applicant argues that De Villiers, while employed, acted in
breach by serving as a director of
Genvia, colluding with Genadyne,
and appropriating confidential information. It stresses that
undertakings were dishonoured and
that only a court order can secure
compliance. Reliance is placed on
Reddy
[5]
where
the risk of disclosure of confidential information to a competitor
justified enforcement.
[7]
The respondent counters that EMT’s business has fundamentally
changed: its distribution agreement
with Genadyne has been
terminated, its proprietary interest in customer connections has
dissipated, and its sales representatives
retain the strongest client
relationships. He contends that enforcement beyond 1 July 2026 is
punitive, citing
Aranda
Textile Mills
[6]
,
where
skills and know how in the public domain were held not to
constitute proprietary interests.
ANALYSIS
[8]
The applicant’s case rests on the assumption that its
proprietary interests remain intact notwithstanding
the termination
of the Genadyne distribution agreement. Yet, the evidence shows that
EMT no longer distributes Genadyne’s
NPWT devices, which formed
the backbone of its business. Its customers are now confronted with
unfamiliar products, while Genadyne,
through Genvia, continues with
established brand recognition. In these circumstances, the
protectable interest in customer connections
is substantially
diluted.
[9]
Confidential information, too, must be assessed in context.
Information that is obsolete or no longer
capable of conferring
competitive advantage cannot qualify as a trade secret.
[7]
The applicant has not demonstrated that the information allegedly at
risk retains economic value in light of its changed business
model.
[10]
The restraint of trade cannot serve as a mechanism to punish De
Villiers for past misconduct. Its purpose
is to prevent unfair
competition, not to mete out retribution.
[8]
Where competition is no longer viable because the applicant’s
business model has altered, enforcement of the restraint beyond
1
July 2026 serves no legitimate purpose.
[11]
The disclosure of “without prejudice” mediation
discussions by the applicant is troubling. The
rule exists to protect
candid settlement negotiations. While not decisive of the present
application, it underscores the contrived
nature of the applicant’s
reliance on concessions allegedly made during mediation.
CONCLUSION
[12]
In balancing the interests, the Court finds:
a) The
applicant’s protectable interests in customer connections and
confidential information have dissipated
with the termination of the
distribution agreement.
b)
Enforcement of the restraint beyond 1 July 2026 would impose economic
inactivity on the respondent without
corresponding benefit to the
applicant.
c)
Public
policy, informed by constitutional values of freedom to trade and
work, militates against punitive enforcement.
[9]
[13]
The appropriate relief is limited enforcement of the confidentiality
undertakings, which the respondent
does not oppose, and recognition
that the restraint ceases on 1 July 2026.
ORDER
[14]
Consequent to the findings in this judgment, the
following orders are made:
1.
The application to enforce the restraint of trade until 26 January
2027 is dismissed.
2.
The restraint of trade shall endure until 1 July 2026, thereafter
lapsing.
3.
The first respondent is interdicted from disclosing or misusing the
applicant’s confidential information
at any time.
4.
The applicant is directed to pay the costs of this application,
including the
costs of senior counsel.
MPN MBONGWE
JUDGE OF THE HIGH
COURT
GAUTENG DIVISION,
PRETORIA
APPEARENCES
For Applicant:
AJ DANIELS SC
Instructed by:
Bowman Gilfillan
Inc.
For the Respondent:
I MILTZ SC
With:
C de WITT
Instructed by:
Malan Scholes
Attorneys
Date of Hearing:
29 April 2026
Date of
Judgment:
04 June 2026
THIS
JUDGMENT WAS ELECTRONICALLY TRANSMITTED TO THE PARTIES’ LEGAL
REPRESENTATIVES AND UPLOADED ONTO CASELINE ON 04 JUNE 2026.
[1]
Magna
Alloys & Research (SA) (Pty) Ltd v Ellis
[1984] ZASCA 116
;
1984 (4) SA 874
(A) at 898A B.
[2]
Basson
v Chilwan & Others
[1993] ZASCA 61
;
1993 (3) SA 742
(A) at 767A D.
[3]
Basson
,
supra.
[4]
J Louw
& Co (Pty) Ltd v Richter
1987 (2) SA 237
(N) at 243B C.
[5]
Reddy v
Siemens Telecommunications (Pty) Ltd
2007 (2) SA 486
(SCA).
[6]
Aranda
Textile Mills (Pty) Ltd v Hurn
[2000] 4 All SA 183 (E).
[7]
Townsend
Productions (Pty) Ltd v Leech
2001 (4) SA 33
(C) at 53J 54B.
[8]
Automotive
Tooling Systems (Pty) Ltd v Wilkens
2007 (2) SA 271
(SCA) at 277G H.
[9]
Napier
v Barkhuizen
2006 (4) SA 1
(SCA) at [6];
Afrox
Healthcare Bpk v Strydom
2002 (6) SA 21
(SCA) at [18 30]).