Case Law[2025] ZAWCHC 415South Africa
NJR Steel Cape Town (Pty) Limited v Gordon and Another (Reasons) (2025/123779) [2025] ZAWCHC 415 (26 August 2025)
High Court of South Africa (Western Cape Division)
26 August 2025
Headnotes
Summary: Urgency - final interdict –restraint of trade – breach and enforceability – locus standi application to strike out averments in the replying affidavit – no formal application to strike out filed leave to file further affidavits – referral to oral evidence – requirements for final interdict met – not repugnant to public policy – restraint of trade found to be reasonable and enforceable.
Judgment
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## NJR Steel Cape Town (Pty) Limited v Gordon and Another (Reasons) (2025/123779) [2025] ZAWCHC 415 (26 August 2025)
NJR Steel Cape Town (Pty) Limited v Gordon and Another (Reasons) (2025/123779) [2025] ZAWCHC 415 (26 August 2025)
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# IN
THE HIGH COURT OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
# (WESTERN
CAPE DIVISION, CAPE TOWN)
(WESTERN
CAPE DIVISION, CAPE TOWN)
## Not
Reportable
Not
Reportable
Case
no: 2025/123779
In
the matter between:
#
# NJR
STEEL CAPE TOWN (PTY) LIMITEDApplicant
NJR
STEEL CAPE TOWN (PTY) LIMITED
Applicant
#
# and
and
RUPERT
FRANCOIS GORDON
First Respondent
STEWARTS
AND LLOYDS HOLDINGS
(PTY)
LIMITED
Second
Respondent
Neutral
citation:
NJR
Steel Cape Town (Pty) Limited
v
Rupert Francois
Gordon and another
(Case
no 2025/123779) [2025] ZAWCHC (6 AUGUST 2025)
## Coram:NJOKWENI AJ
Coram
:
NJOKWENI AJ
Heard
:
6 August 2025
Delivered
ex
tempore
:
6 August 2025
Reasons
delivered
:
26 August 2025
Summary:
Urgency -
final interdict –restraint of trade – breach and
enforceability – locus standi application to strike
out
averments in the replying affidavit – no formal application to
strike out filed leave to file further affidavits –
referral to
oral evidence – requirements for final interdict met –
not repugnant to public policy – restraint
of trade found to be
reasonable and enforceable.
ORDER
1.
The rules relating to forms, service,
notices, and time periods, to
the extent necessary, are dispensed with in terms of uniform rule
6(12).
2.
The matter is declared sufficiently urgent
to be heard on urgent
basis.
3.
The first respondent’s informal
application to strike out is
condoned.
4.
Application to strike out impugned new
averments from the replying
affidavit is dismissed.
5.
Application to strike out “hearsay”
evidence from the
replying affidavit is dismissed.
6.
The first respondent, for a period
of six months, from 1 August
2025, (“the restraint period”) is hereby interdicted and
prohibited from:
6.1
rendering services as an employee of the second respondent (Stewarts
and Lloyds Holdings
(Pty) Ltd).
6.2
being directly or indirectly involved with the second respondent
within a 250-kilometer
radius of the applicant's business premises
situate at 1[…] B[…] Avenue, Epping Industria, Cape
Town, Western Cape
(“the restraint area”).
6.3
marketing, selling, or supplying goods or services similar to those
of the applicant within
the restraint area and during the restraint
period.
7.
The second respondent is hereby interdicted
and prohibited from
employing the first respondent within the restraint area during the
restraint period.
8.
The first and second respondents jointly
and severally one paying the
other be absolved to pay the costs of the application, including the
costs of counsel, on scale C.
# WRITTEN
REASONS/JUDGMENT
WRITTEN
REASONS/JUDGMENT
## Njokweni
AJ
Njokweni
AJ
## Introduction
Introduction
[1]
This application served before me in the urgent court on 6 August
2025. It
concerns an urgent application brought by NJR Steel Cape
Town (Pty) Ltd (the applicant) against Rupert Francois Gordon (the
first
respondent) and Stewarts and Lloyds Holdings (Pty) Ltd (the
second respondent). The case revolves around enforcing a restraint of
trade agreement signed by the first respondent during his employment
with the applicant.
[2]
The applicant, NJR Steel Cape Town (Pty) Ltd, sought urgent
interdictory
relief to enforce a restraint of trade and
confidentiality agreement signed by the first respondent, Rupert
Francois Gordon, on
2 October 2023. The first respondent allegedly
breached this agreement by joining the second respondent, Stewarts
and Lloyds Holdings
(Pty) Ltd, a direct competitor, on 1 August 2025.
The applicant fears irreparable harm to its proprietary
interests, including
customer connections and confidential
information, and seeks to prevent both respondents from engaging in
unlawful competition.
The applicant contended that the matter
is urgent as the restraint is valid for only six months, expiring on
31 January 2026.
[3]
After I heard oral submissions from counsel of all the parties and
having
considered the matter, I found the matter to be sufficiently
urgent and granted relief to the applicant by making an order
inter
alia
interdicting: (1) the first
respondent from working for the second respondent or engaging in
activities that would compete with
the applicant's business within a
specified area during the restraint period; and (2) the second
respondent from employing the
first respondent within the restraint
area during the restraint period. I then delivered an
ex
tempore
judgment in support of my
order. The respondents have filed leave to appeal against the
entirety of my
ex tempore
judgment and the order I made on 6 August 2025. They have also
requested written reasons in terms of rule 49(1)(c) for the decision.
The full reasons appear below.
Relevant
Facts
[4]
The factual background relevant to the issues for determination is
briefly
set out below.
[5]
NJR Steel Cape Town (Pty) Ltd operates as a steel merchant, selling
various
steel and related products. The first respondent was
employed by the applicant as an internal sales representative from
1
October 2023 to 31 July 2025
. Prior
to this period, he worked for the second respondent for 15 years from
2008 to 2023. On 2 October 2023, the first respondent
signed a
restraint of trade and confidentiality agreement that was attached to
his employment contract as an addendum. The material
relevant terms
thereof:
[6]
The first respondent agreed not to market, sell, or supply any
competitive
products within a 250-kilometer radius of the applicant's
business during the restraint period (employment period plus six
months
after termination). The first respondent is prohibited from
being involved in any competitive business within the restraint area
in any capacity (e.g., as an employee, consultant, shareholder,
etc.).
[7]
The first respondent undertook not to solicit, persuade, or induce
NJR customers
to cease or reduce business with the applicant during
the restraint period. The respondent is prohibited from canvassing or
soliciting
orders from NJR customers for competitive products. The
first respondent agreed to maintain the confidentiality of, and
not
disclose proprietary information, including customer and supplier
lists, business relationships, pricing structures, and trade secrets.
The respondent is prohibited from using confidential information or
business connections for personal benefit or for the benefit
of any
competitive business. These provisions aim to protect the applicant's
proprietary interests, customer relationships, and
confidential
information from misuse by the first respondent during and after his
employment.
[8]
During his time as the applicant’s employee, the first
respondent
had access to, and came into possession of,
confidential and proprietary
information
belonging to the
applicant during his employment. This includes customer contact
details, new personnel relationships, and
confidential information
regarding: steel, tube, and plate requirements, opportunities, and
proposals discussed with the applicant’s
customers. The first
respondent was the applicant's best-performing internal sales
representative, contributing approximately
41.5%
of sales by value
and
43.9%
of sales by volume
over the last
nine months of his employment.
[9]
On 2 July 2015 the first respondent tendered his resignation from the
employ
of the applicant to take up employment with the second
respondent as an internal salesperson to revive dormant customers.
Notwithstanding
better offers by the applicant and the binding effect
of the restraint and confidentiality agreement, on
1
August 2025
, the first respondent
took up employment with the second respondent, a direct
competitor of the applicant, at its Wetton
branch, which is located
less than
15 kilometers
from the applicant's premises and falls within the restraint area.
The second respondent is a direct competitor of the applicant,
selling similar products and targeting the same customer base. It
is considered one of the applicant’s main competitors.
[10]
The first respondent's defence to the applicant's claim is
summarised below.
[11]
The applicant does not have a legitimate proprietary interest in the
TOP 15 customer relationships.
These relationships were
cultivated by Gordon over 15 years with the second respondent, not
during his brief tenure with
the applicant. The applicant
profited from these pre-existing relationships without creating new
goodwill, and thus cannot
claim ownership over them.
[12]
The first respondent’s current role selling Fluid Control
Products is entirely distinct
from the applicant’s steel
products. He handles dormant accounts and uses the second
respondent’s database, posing
no competitive threat to the
applicant. This distinction negates any claim of breach of the
restraint of trade.
[13]
The restraint imposed by the applicant is unreasonably broad,
spanning 12 months unpaid and
a 250-kilometer radius. This
scope disproportionately burdens Gordon, a junior salesman without
strategic knowledge, and
violates public policy by restricting his
constitutional right to work and economic freedom.
[14]
The applicant has failed to demonstrate genuine urgency, as the harm
it claims is speculative
and self-induced due to its delay in filing
the application. Courts require concrete evidence of harm and
the absence of
substantial redress through normal procedures, which
the applicant has not provided.
[15]
The applicant’s claims about protectable confidential
information are vague and unsupported.
The first respondent
asserts that the data in question is transient, public, or originates
with the second respondent, and
the applicant’s reliance on
hearsay further undermines its case.
[16]
Material disputes regarding proprietary interest, competitive threat,
and confidentiality require
oral evidence for resolution. These
disputes prevent the court from ruling in favour of the applicant
based solely on the
papers. A damages action would suffice as an
alternative remedy, which the applicant has failed to address. This
further
weakens the applicant’s case for urgent relief.
[17]
Ruling in favour of the first respondent upholds his constitutional
right to work, dignity,
and economic freedom. The restraint
imposed by the applicant is excessive and contrary to public policy,
as it prevents the
first respondent from pursuing non-competitive
employment.
[18]
In summary, the applicant has failed to establish a protectable
interest, demonstrate urgency,
or justify the restraint’s
scope. First respondent’s arguments align with
constitutional principles and public
policy, compelling the court to
rule in his favour. The applicant asserts that the first respondent
possesses confidential information
regarding customer requirements,
opportunities, and proposals acquired during his employment –
information that is
protectable under the restraint agreement.
[19]
The respondents have raised different points
in
limine
. These points are
procedural challenges raised before addressing the substantive merits
of the case. However, I decided to
hear the merits of the application
before I ruled on those points so I could determine the merits of the
application in the event
that I should decide to dismiss the
in
limine
points. I deal with these
points below.
Urgency
[20]
The issue of whether
a matter should be enrolled and heard as an urgent application is
governed by the provisions of Rule 6(12)
of the Uniform Rules.
The
aforesaid sub-rule allows the court or a judge in urgent applications
to dispense with the forms and service provided for in
the rules and
dispose of the matter at such time and place, in such manner, and in
accordance with such procedure as it deems fit.
It further provides
that in the affidavit in support of an urgent application the
applicant ‘… shall set forth explicitly
the
circumstances which he avers render the matter urgent and the reasons
why he claims that he could not be afforded substantial
redress at a
hearing in due course.’
[21]
The
applicant argues that the matter is urgent because the restraint is
valid for only six months, expiring on
31
January 2026
.
The respondents contend that the urgency is self-created, as the
applicant delayed for weeks before launching this application
following the first respondent’s resignation on 4 July 2025. In
this regard, the court held in
East
Rock Trading 7 (Pty) Ltd and Another v Eagle Valley Granite (Pty) Ltd
and Others
[1]
:
‘
[8]
In my view the delay in instituting proceedings is not, on its own a
ground, for refusing to regard the matter as urgent. A
court is
obliged to consider the circumstances of the case and the explanation
given. The important issue is whether,
despite
the delay, the applicant can or cannot be afforded substantial
redress
at
a hearing in due course. A delay might be an indication that the
matter is not as urgent as the applicant would want the Court
to
believe. On the other hand
,
a delay may have been caused by the fact that the Applicant was
attempting to settle the matter
or
collect more facts with regard thereto.
[2]
[9]
It means that if there is some delay in instituting the proceedings
an Applicant has to explain the reasons for the delay and
why despite
the delay, he claims that he cannot be afforded substantial redress
at a hearing in due course. I must also mention
that the fact the
Applicant wants to have the matter resolved urgently does not render
the matter urgent. The correct and the crucial
test is whether, if
the matter were to follow its normal course as laid down by the
rules, an Applicant will be afforded substantial
redress.
If he
cannot be afforded substantial redress at a hearing in due course,
then the matter qualifies to be enrolled and heard as an
urgent
application
. If, however, despite the anxiety of an Applicant he
can be afforded a substantial redress in an application in due course
the
application does not qualify to be enrolled and heard as an
urgent application
.’
[22]
In
East
Rock
[3]
,
it
was held:
‘
|7]
It
is important to note that the rules require absence of substantial
redress.
This
is not equivalent to the irreparable harm
that
is required before the granting of an interim relief.
It
is something less
.
He may still obtain redress in an application in due course, but it
may not be substantial. Whether an applicant will not be able
obtain
substantial redress in an application in due course will be
determined by the facts of each case. An applicant must make
out his
cases in that regard.’
[23]
In this application, there was an exchange of correspondence between
the applicant’s
attorneys and first respondent, in which the
latter was reminded of the undertakings he made to the applicant in
respect of restraint
of trade and confidentiality, especially the
restraint area and period.
Instead of the first respondent
responding to such correspondence
, on 12 July
2024, the second respondent’s attorneys wrote to the
applicant’s attorneys and advised that the first respondent
would only be involved in marketing and sales of the second
respondent’s fluid products.
[24]
On 21 July 2025, the applicant sought to conclude an “Exit
Agreement” with the
first respondent.
This agreement was
intended to record the position in which the first respondent would
be employed by the second respondent and
would contain further
undertakings and assurances to protect the applicant’s
confidential and proprietary information and
interests
.
The following day, 22 July 2025, the second respondent’s
attorneys informed the applicant that the first respondent will
not
be signing the Exit Agreement without proposing any counter terms and
undertakings that would satisfy the applicant as sufficient
protection.
[25]
In a letter dated 28 July 2025, the applicant’s attorneys
informed the respondents’
attorneys that the refusal to sign
the Exit Agreement or even to suggest counter undertakings or wording
thereof was a clear indication
of the respondents’ intention to
breach the restraint and confidentiality undertakings between the
applicant and the first
respondent. The applicant further asserted
that the second respondent would unlawfully benefit from such a
breach.
The applicant, in the said letter, informed the
respondents that the alleged employment of the first respondent in
the second respondent’s
fluid division was fabricated
.
In the result, the applicant informed the respondents that the
employment of the first respondent by the second respondent would
be
a breach of the restraint and confidentiality agreement. The second
respondent would unlawfully compete with the applicant and
the
refusal to sign the Exit Agreement was a clear indication that the
respondents intend to breach the restraint and confidentiality
agreement.
[26]
The applicant contends that these actions constitute a
prima
facie
breach of the restraint
addendum and confidentiality provisions.
The applicant, in the
said letter, informed the respondents that it had instructed its
attorneys to make an urgent application to
this Court for an
interdict and costs
. The applicant’s
attorneys even stated in their letter dated 28 July 2025 that they
would have preferred to enrol the urgent
application for 31 July
2025, but to do so would be too short a notice, and as such they will
enrol the urgent application for
6 August 2025. Indeed the
application was enrolled for hearing on 6 August 2025 and it served
before me in the urgent court as
an urgent application. In the
result, I disagree with contention that urgency was self-created. The
factual background relating
to attempts by the applicant to secure
from the respondents an Exit Agreement or similar undertaking as
proposed in the Exit Agreement,
prima
facie
suggests that there is
reasonable apprehension of harm by the applicant, being unlawful use
of confidential proprietary information
and client lists. It is
apposite to mention that the aforementioned top 15 customers are not
the applicant’s only customers.
The first respondent’s
relations with other customers were enhanced by his employment with
applicant.
[27]
I am alive to the fact that the applicant may still obtain redress in
an application in due
course, but it may not be substantial. In
casu
,
I am persuaded that the applicant cannot be afforded
substantial
redress in due course if the
final interdict is not granted and in the circumstances, I find that
the balance of convenience favoured
the applicant that I should hear
the matter, as I did, on an urgent basis.
Jurisdiction
[28]
The second respondent claims that the court lacks jurisdiction over
it because its principal
office is in
Bedfordview,
Gauteng
. The applicant counters this
by arguing that the unlawful acts constituting
unlawful
competition
are being perpetrated
within the jurisdiction of the court (Cape Town), and the proprietary
interests being harmed are situated
at the applicant’s
registered office in Epping Industria, Cape Town. The applicant also
invokes the
continentia causae
rule
,
which allows the court to exercise jurisdiction over the entire cause
of action for reasons of convenience, justice, and good
sense. This
point was abandoned (wisely so, in my view) by second respondent’s
counsel.
Striking
out averments in replying affidavit as new matter
[29]
The first respondent seeks an order to strike out the following
averments from the replying
affidavit.
‘
Replying
Affidavit
(paragraph [14] p. 201-2) where the Applicant claims that Gordon
strengthened
the
TOP 15 customer relationships during his 22 months with them. This
claim wasn’t made in the Founding Affidavit (paragraph
[39], p.
12-13), which only argued that these relationships were their
property.
Replying
Affidavit, paragraph [18] (p. 203) where it is asserted that new
customer
information (e.g., contact personnel details)
is
protectable, despite this not having been raised in the Founding
Affidavit.’ [my emphasis]
[30]
In the answering affidavit, the applicant uses the word
developed
- as opposed to
strengthens
- as used in the replying affidavit - to describe the the
first respondent’s relationship with the applicant’s
clients or top 15 customers. I do not find the use of the term
strengthen
to mean anything different to
develop
in the context of describing the effect of the first respondent’s
employment with the applicant on improving, enhancing,
developing and
strengthening of customer relationships with the first respondent and
the applicant’s customers. In the
ex
tempore
judgment I even stated ‘
one
does not need to be a Harvard scholar in English to understand the
contextual use of these said words’
in
casu.
[31]
The
application to strike out or intent to move same was mentioned for
the first time only in the first respondent’s heads
of
argument, which were filed after applicant’s heads of argument
were filed. During the hearing, I asked whether there was
a formal
application before me to strike out those impugned provisions, and
there was none. An application to strike out is an
interlocutory
application and as such an application to strike out is an
application on notice to the other party
[4]
.
I am very much aware that due to the urgency of the matter I have the
discretion to permit a request to strike out certain
averments
to be made within the affidavit itself.
[5]
Notwithstanding, to simply mention an application to strike out in
heads of argument, to me it is bad practice to do so.
This
is because the applicant is ambushed.
.
[32]
Further, the
second respondent could and should have applied for leave to file a
further affidavit after the replying affidavit
was filed, so that the
impugned averments in the replying affidavit could be addressed
fairly.
Notwithstanding
the said shortcomings, I acknowledge that, due to the urgency,
certain procedural defects could be overlooked and
as such I condoned
the defective application to strike out because of the pressured
situation created by the urgency of the matter
and the truncated
timetable.
[6]
An application to
strike out is an application incidental to pending proceedings within
the meaning of rule 6(11) and should therefore
be initiated by way a
simple application on notice.
[7]
[33]
I find no merit in the application to strike out, as the content in
question did not introduce
a new matter and was consistent with the
applicant's original submissions.
Striking
out hearsay evidence in replying affidavit
[34]
First respondent seeks the striking out of
the
following:
‘
Allegations
about Gordon’s dealings with TOP 15 customers, based on
information from others (Replying Affidavit, paragraph
[14] p.
201-2), without specifying sources or justifying admissibility.
Claims about protectable new information, relying on unspecified
third-party information (Replying Affidavit, paragraph1[8] p. 203).
Lacking personal knowledge, these statements prejudice Gordon,
as he
cannot test their veracity (Answering Affidavit, paragraph [16] p.
108). This Court should strike them out with costs, per
supra.’
[35]
For these reasons, it is contended that the impugned averments are
contended to constitute
hearsay evidence, which is inadmissible and
therefore should be struck out. There is no merit to this point. The
deponent, Mr Jacobs
states that although he has not interacted
directly with the first respondent in this particular matter, he has
been kept informed
and involved in decisions and actions taken
against respondents, including the applicant’s dealings with
issues concerning
the first respondent’s employment with and
his resignation from the applicant. There is no merit to this point,
the application
to strike out should fail.
Issues
[36]
From this background I have distilled the following issues for
determination.
[37]
Whether there are any new averments in the replying affidavit that
must be struck out.
[38]
Whether certain evidence contained in the founding affidavit is
hearsay evidence and thus inadmissible
and falls to be struck out.
[39]
Whether the restraint of trade and confidentiality provisions signed
by the first respondent
are reasonable and enforceable.
[40]
The requirements for granting of a final interdict against both
respondents are met.
Legal
Framework
[41]
The
position in our law is, therefore, that a party seeking to enforce a
contract in restraint of trade is required only to invoke
the
restraint agreement and prove a breach thereof.
[8]
Thereupon, a party who seeks to avoid the restraint, bears
the
onus
to
demonstrate on a balance of probabilities, that the restraint
agreement is unenforceable because it is unreasonable.
[42]
These principles have
been reaffirmed in other decisions of our courts. In
Basson
v Chilwan
and
Others
,
Botha JA stated, in a separate judgment, that:
‘
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 than 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.
In regard to
these two opposing considerations of public policy, it seems to me
that the operation of the former is exhausted by
the placing of
the
onus
on
the covenantor; it has no further role to play thereafter, when the
reasonableness or otherwise of the restraint is being enquired
into
.’
[43]
Nicholas
J, as he then was, stated in
Super
Safes (Pty) Ltd and Others
[9]
v
Voulgarides and Others
:
‘
A
bare covenant not to compete cannot be upheld. A restraint against
competition
must,
if it is to be valid, serve some interest of the person in whose
favour it was inserted - the purchaser of a business, for
example,
who requires protection against the erosion of its goodwill by the
competition of the seller; or the employer who requires
that his
trade secrets and his trade connections be protected against
exploitation by the man whom he is taking into his employment.’
[44]
The
test set out in
Basson
v Chilwan and Others
[10]
,
for determining the reasonableness or otherwise of the restraint of
trade provision, is the following:
‘
[15.1]
Is there an interest of the one party, which is deserving of
protection at the determination of the agreement?
[15.2]
Is such interest being prejudiced by the other party?
[15.3]
If so, does such interest so weigh up qualitatively and
quantitatively against the interest of the latter party that the
latter should not be economically inactive and unproductive?
[15.4]
Is there another facet of public policy having nothing to do with the
relationship between the parties, but which requires
that the
restraint should either be maintained or rejected?’
[16]
In Kwik Kopy (SA) (Pty) Ltd v Van Haarlem and Another
1999
(1) SA 472
(W)
at 484E, Wunsh J added a further enquiry, namely whether the
restraint goes further than is necessary to protect the interest.
[17]
It is well established that the proprietary interests that can be
protected by a restraint agreement, are essentially of two
kinds,
namely:
17.1
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;
17.2
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.’
[45]
As
I have pointed out above, the
onus
is
on the respondent to prove the unreasonableness of the restraint. He
must establish that he had no access to confidential information
and
that he never acquired any significant personal knowledge of, or
influence over, the applicant’s customers whilst in
the
applicant’s employ. It suffices to show that trade connections
through customer contact exist and that they can be exploited
if the
former employee were employed by a competitor. Once that conclusion
has been reached and it is demonstrated that the prospective
new
employer is a competitor of the applicant, the risk of harm to the
applicant, if its former employee were to take up employment,
becomes
apparent.
[11]
Analysis
Does
the applicant lack protectable proprietary interest?
[46]
The first
respondent’s defence on the merits is that the applicant’s
claim of having a proprietary interest in respect
of various
customers is untrue and thus the applicant is not entitled to the
relief it seeks. In fact, the first respondent’s
contention in
this regard is limited or focused only on TOP 15 customers of the
applicant which the First Respondent claims were
previous customers
of the second respondent with whom the first respondent built a
relationship over a period of fifteen years
whilst previously in the
employ of the second respondent. The first respondent explains that
he commenced employment in 2008 with
the second respondent, also in
internal sales at the Epping branch. He spent fifteen years there
before resigning and joining the
applicant for an improved
remuneration package in October 2023. During his fifteen years
with the second respondent, he formed
relationships with the
representatives of the so-called Top 15 customers that he continued
to service during his 22 months with
the applicant. The first
respondent contends that these relationships were not cultivated
whilst he was in the applicant’s
employ, they were
pre-existing. These customers buy steel, tube and plate products and
were “brought” or “transitioned”
by the first
respondent from the second respondent to the applicant in October
2023.
[47]
The first respondent
has spent the last 22 months dealing with the TOP 15 customers.
In so doing, he enhanced the relationship
between the applicant and
these customers. I agree with the applicant’s counsel
that it can never be the case, as the
respondents would have it, that
the customer relationships, once developed over time, remain static
and unenhanced over a further
period of almost two years whilst the
first respondent was dealing, on a regular basis, with these
customers on behalf of the applicant.
As the applicant states in
reply, the respondents conveniently lose sight of the fact that over
the past 22 months key personnel
of the Top 15 customers, with whom
the first respondent previously dealt whilst in the second
respondent’s employ, have been
replaced by new personnel.
For example, Jerome Scritten, a buyer at Holman Engineering (one of
the Top 15 customers) and
Dylan Heyns, a buyer at Servo (also a Top
15 customer), left their respective employment with those customers
and were replaced
by someone else who commenced dealing with the
first respondent
.
It is precisely these
new relationships that the first respondent has developed during his
employment with the applicant that it
seeks to protect by means of
this application.
It
must therefore
follow that any new
information acquired by the first respondent, such as new contact
personnel details, is protectable as the first
respondent was not
possessed of this information when he joined the applicant from
the
second
respondent in October
2023
.
[48]
As stated above, the
first applicant contributed 45.5% of applicant’s sales by value
and 43.9% by volume.
The first respondent not only had
access to and relationships with the applicant’s Top 15
customers but also with other customers
of the applicant.
The
first respondent freely and voluntarily signed the restraint addendum
and undertook inter alia not to and is prohibited from
:
(a)
being involved in
any
competitive business within the restraint area in any capacity
(e.g., as an employee, consultant,
shareholder, etc.) within the restraint period.
(b)
soliciting, persuading, or
inducing NJR customers to cease or reduce
business
with the applicant during the restraint period.
(c)
canvassing or soliciting orders
from NJR customers for competitive products
.
[49]
When informing the
applicant of his employment offer from the second respondent and his
intention to resign from the applicant,
he never mentioned that he
would be employed in the second respondent’s fluid business or
division. This was mentioned after
the applicant informed the
respondents of its intention to strictly enforce the restraint and
confidentiality undertakings made
by the first respondent. In fact,
the first respondent concedes in the answering affidavit that:
‘…
there
may be common clients (given the nature of the steel industry) and
that a common client would be one that may require both
a fluid
control product, as well as a steel and tube product” (i.e.
steel and tube products also sold by the applicant),
but says such an
event would not be a breach of the restraint.’
[50]
This is precisely the
applicant’s concern that not only will the first respondent’s
employment with the second respondent
place the first respondent in a
position to deal with the applicant’s customers and exploit its
customer relationships, but
that both respondents acknowledge that
the first respondent would be able to offer and sell competitive
products to those customers.
This, precisely, is the risk the
applicant sought to mitigate through the exit agreement which the
first respondent refused to
sign and which refusal the second
respondent supports.
[51]
The ex-employer
seeking to enforce a protectable interest recorded in a restraint
against his ex-employee does not have to show
that the ex-employee
has, in fact, utilized confidential information; it merely needs to
show that the ex-employee could do so
.
The very purpose of the restraint agreement is to relieve the
applicant from having to show
bona
fides
or
lack of retained knowledge on the part of the respondent concerning
the confidential information. In these circumstances, it
is
reasonable for the applicant to enforce the bargain it has exacted to
protect itself. Indeed, the very
ratio
underlying
the bargain is that the applicant should not have to contend itself
with crossing his fingers and hoping that the respondent
would act
honourably or abide by the undertakings that he has given. It does
not lie in the ex-employee’s
ipse
dixit
[my
own words], who has breached a restraint agreement by taking up
employment with a competitor to say to the ex-employer ‘
Trust
me: I will not breach the restraint further than I have already been
proved to have done
’
.
[12]
First
respondent has access to confidential proprietary information
[52]
The 22-month period
spent in the applicant’s employ also means that the first
respondent is possessed of confidential information
belonging to the
applicant (and not to him or the second respondent) regarding steel,
tube and plate requirements, opportunities
and proposals that he
discussed with the Top 15 customers and information he received
concerning other customers of the applicant,
while representing and
being employed by the applicant. In respect of such
confidential information, the fact that the first
respondent might
previously and whilst representing the second respondent have dealt
with a customer, does not detract from the
protectable nature of the
confidential nature that came into his possession whilst in the
applicant’s employ.
[53]
In
Rawlins
and Another v Caravantruck (Pty) Ltd
[13]
,
the former employee stated that during his employment with his former
employer, he largely dealt, not with its existing customers,
but with
his own pre-existing following or buyers whom he later found. This
particular argument was convincingly dealt with by
Nestadt JA as
follows:
“…
what
Rawlins says is that during his employment with the respondent he
largely dealt, not with its existing customers, but with
his own
pre-existing following or buyers whom he later found. Does this
establish that the [former employer] did not have a proprietary
interest of the kind under consideration? It is, of course, a factor
in [the former employee’s] favour; but not conclusively
so …
Even though the persons to whom an employee sells and whom he
canvasses were previously known to him and in this sense
‘his
customers’, he may nevertheless during his employment, and
because of it, form an attachment to and acquire an
influence over
them which he never had before. When this occurs, what I call the
customer goodwill which is created or enhanced
is at least in part an
asset of the employer. As such it becomes a trade connection of the
employer which is capable of protection
by means of a restraint of
trade clause.
The
onus being on Rawlins to prove the unreasonableness of the restraint,
it was for him to show that he never acquired any significant
personal knowledge of or influence over the persons he dealt with as
a salesman of the [former employer] over and above that which
previously
existed.”
[54]
The first respondent
provides no such evidence. As in
Rawlins
,
the first respondent did not allege that he did not acquire such
knowledge or influence, nor could this be inferred – on
the
contrary, it appears no less probable that the first respondent’s
relationships with he dealt with whilst at the applicant
were such as
to make it reasonable for the applicant to protect itself by
enforcing the restraint. Also as in
Rawlins
,
it is a fair inference in the circumstances that the first
respondent’s 22-month employment with the applicant gave him
the opportunity to consolidate or even strengthen the prior rapport
he had had with these customers.
[55]
It follows that the
first respondent has
failed to discharge the onus of demonstrating that the restraint is
unreasonable.
The
first respondent’s bald denial that the restraint area (250 km
from the applicant’s premises) is reasonable does
not discharge
the onus. He has failed to provide any factual basis in support of
this submission.
The
first respondent serviced approximately 60 customers on a monthly
basis, the Top 15 of which were those with whom he had formed
relationships whilst employed by the second respondent.
[56]
The first respondent
does not contend that the applicant does not have a proprietary
interest in respect of those customers serviced
by the first
respondent that fall outside the Top 15 customers.
[57]
It is these reasons
that persuaded me that the applicant has a protectable proprietary
interest in the present application.
First
respondent employment by the second respondent poses a competitive
threat to applicant
[58]
In
Reddy
v Siemens Telecommunications (Pty) Ltd
[14]
,
the
court enforced restraint because Reddy joined a direct competitor
(Ericsson) in a similar role servicing telecommunication operators
risking disclosure of confidential information. First respondent’s
counsel sought to persuade me that the facts in Reddy
are
distinguishable from the present application because unlike Reddy,
who joined a direct competitor (Ericsson) in a similar role
servicing
telecommunication operators, Gordon (the first respondent) sells
Fluid Control Products, distinct from the applicant’s
steel
products. The difficulty with this proposition lies in the admissions
made by the respondents that in the course and scope
of his
employment with the second respondent, the first respondent might
invariably cross sell steel and tube products to customers
that came
to the second respondent to purchase fluid control products. Such
customers might include the applicant’s Top 15
customers
including those that fall outside the Top 15 customers. In that
situation, it would be difficult if not impossible for
the applicant
to police strict compliance with the restraint and confidentiality
undertakings by the respondents. If breach of
those undertakings were
to occur the second respondent would benefit unfairly from protected
and confidential proprietary information
of the applicant.
[59]
In
Experian
[15]
,
the
court held:
‘
[21]Where
an applicant as employer, has endeavoured to safeguard itself against
the unpoliceable danger of the respondent communicating
its trade
secrets to, or utilising its customer connection on behalf of a rival
concern after entering that rival concern’s
employ by obtaining
a restraint preventing the respondent from being employed by a
competitor, the risk that the respondent will
do so is one which the
applicant does not have to run and neither is it incumbent upon the
applicant to enquire into the bona
fides of the respondent,
and demonstrate that he is mala fides before being allowed
to enforce its contractually
agreed right to restrain the respondent
from entering the employ of a direct competitor (see IIR South
Africa BV (Incorporated
in the Netherlands) t/a Institute for
International Research v Tarita and Others
2004
(4) SA 156
(W)
at 166I to 167C). In such circumstances, all that the applicant
needs do is to show that there is secret information to
which the
respondent had access, and which, in theory, the respondent could
transmit to the new employer should he desire to do
so.’
[60]
The second respondent’s counsel sought to persuade this court
that in the past, the second
respondent had employed the applicant’s
former employees and in those circumstances the applicant and the
second respondent
were able to negotiate and conclude acceptable
arrangements whereby such former employees would sign a formal
written undertaking
to comply with restraint of trade for a period of
six months after their employment with the second respondent
resulting in applicant
not interdicting such former employees from
being employed by the second respondent. I was directed to annexure
“
RMG2”
of the second respondent’s answering affidavit being an example
of such an undertaking.
[61]
I must pause to mention that prior to being referred to annexure
“
RMG2”
I
understood the respondents’ defence to be that they intended to
issue undertakings not to breach the restraint and confidentiality
undertakings made by the first respondent to the applicant but were
unable to do so because the applicant failed to furnish
them
with acceptable arrangements (i.e. draft undertaking acceptable to
the respondents). However, on perusal of annexure “
RMG2”
and after debating the submissions
made with regard to annexure “
RMG2”
counsel for the second respondent, I
understood the submission to be that I should find that it is
the applicant who failed
to provide acceptable information or
proposals that resulted in failure to execute a fresh undertaking
acceptable to the respondents.
[62]
Contrary to that submission, annexure “
RMG2”
in fact proves that the respondents
were aware and in possession of the kind of an undertaking that was
acceptable to the applicant
and which was worded in a manner
acceptable to the applicant. Notwithstanding, the respondents did not
offer the applicant such
an undertaking. In fact, they sought the
applicant to agree to arrangements or an undertaking suitable to the
respondents but not
protecting the applicant’s interest. In the
result, the applicant presented the respondents with a draft exit
agreement.
The agreement was worded in a manner that would allow the
first respondent to be employed at the second respondent but with
safeguards
on policing non-compliance with undertaking in terms
thereof. In fact, the respondents flatly refused to sign the exit
agreement
on the basis that the first respondent would be employed in
the second respondent’s fluid control products section.
[63]
It is against this backdrop that the applicant’s attorneys
wrote to the respondents’
attorneys informing them that:
‘…
that
refusal to sign the Exit Agreement or even to suggest counter
undertakings
or
wording thereof was a clear indication of the respondents’
intention to breach the restraint and confidentiality undertakings
between applicant and first respondent and the second respondent
would unlawfully benefit thereby. The applicant, in the said letter,
informed the respondents that the alleged employment of the first
respondent in the second respondent’s fluid division was
a
construct.’
[64]
For reasons stated above, I was persuaded that the respondents posed
a competitive threat to
the applicant’s business even though
the respondents claim that the first respondent is employed in the
fluid control section
of the second respondent’s business,
which does not compete with the applicant’s steel and tube
business.
Prima
facie
breach
[65]
The following common cause facts are relevant to establish whether
the applicant has established
a
prima
facie
breach.
[66]
The applicant
conducts business as a steel merchant which markets and sells a
variety of steel and related products, including steel
flat sheets
and plates, tubing, grating and mesh, roof sheets, perimeter and
palisade fencing, hardware and steel paint products.
The applicant’s
business overlaps substantially with the second respondent’s,
with the exception of the fluid control
division, which products the
applicant and the NJR Steel group do not offer for sale.
[67]
The first respondent
was employed by the applicant as an internal sales representative at
the applicant’s business premises
from 1 October 2023 to 31
July 2025, a period of 22 months. The terms and conditions of the
first respondent’s employment
with the applicant are recorded
in the written letter of employment, dated 2 October 2023. As part of
the first respondent’s
duties and responsibilities as an
internal sales representative for the applicant, the first respondent
had access to and has become
possessed of information that is
confidential and proprietary to the applicant.
[68]
In the performance of
his duties and responsibilities as an internal sales representative
for the applicant, the first respondent
was responsible for servicing
and developing the business relationships with the applicant’s
key customers, i.e. the applicant’s
key accounts were
considered as the applicant’s best performing internal sales
representative.
[69]
The lifeblood of the
applicant’s business is the relationship it has with its
customers, in that on average over the last
nine months of October
2024 through to June 2025, has been responsible for approximately
41.5% of the applicant’s sales,
by value; and 43.9% of the
applicant’s sales, by volume.
[70]
The first
respondent’s letter of employment incorporates a written
restraint addendum in terms of which the first respondent
essentially
undertook for a period of six months from the date of the termination
of his employment not to, either alone or together
with any other
person, market, sell or supply any competitive product (as defined)
within a radius of 250 kilometers of any place
at which the applicant
carries on business or do any business with any of the applicant’s
customers (as defined) within the
aforesaid radius.
[71]
The second respondent
is a direct competitor of the applicant, selling essentially the same
products as the applicant, targeting
customers (and potential
customers) in the same general area, apart from its fluid control
division.
[72]
The second
respondent, which also has branches throughout South Africa, is
considered by the NJR Steel group as one of its main
competitors.
From 1 August
2025, the first respondent has taken up employment with the second
respondent at its Wetton branch,
which is less than 15
kilometers from the applicant’s business premises and falls
within the 250-kilometer restraint area.
The applicant’s
attempts to reach an amicable solution in the form of the execution
of an exit agreement were rejected by
the respondents.
[73]
It is for
the
reasons
stated above that I find that there
is
a
prima
facie
breach
of the restraint addendum.
Public
policy and reasonableness of restraint
[74]
The
locus
classicus
on
this subject is
Magna
Alloys and Research (SA) (Pty) Ltd v Ellis
[16]
,
where Rabie CJ summarised the legal position inter alia, as
follows:
‘
12.1
There is nothing in our common law which states that a restraint of
trade agreement is invalid or unenforceable;
12.2
It is a principle of our law that agreements which are contrary to
the public interest are unenforceable. Accordingly, an agreement
in
restraint of trade is unenforceable if the circumstances of the
particular case are such, in the court’s view, as to render
enforcement of the restraint prejudicial to the public interest;
12.3
It is in the public interest that agreements entered into freely
should be honoured and that everyone should, as far as possible,
be
able to operate freely in the commercial and professional world;
12.4
In our law the enforceability of a restraint should be determined by
asking whether enforcement will prejudice the public interest;
12.5
When someone alleges that he is not bound by a restraint to which he
had assented in a contract, he bears the onus of
proving
that enforcement of the restraint is contrary to the public
interest.’
[75]
The first respondent
signed an employment contract that contains restraint of trade and
confidentiality provisions. He has
chosen to take up employment
with a competitor of the applicant and to work in the restraint area,
with full knowledge of those
provisions and knowingly in breach of
them.
[76]
The respondents have
failed to allege that the restraint is unreasonable, let alone
discharge the
onus
on them to establish
that the restraint is unreasonable.
[77]
The next question, in
terms of
Chilwans,
is whether the
applicant’s interest so weighs up qualitatively and
quantitatively against the interest of the first respondent
that the
latter should not be economically inactive and unproductive.
[78]
Bearing the onus in
this regard, the first respondent adduced no evidence to show that
enforcement of the restraint is disproportionate,
having regard to
any of his countervailing interests. He resigned from the applicant
of his own accord. In the circumstances, he
remains free to earn a
living by using his skills and expertise in the industry. There was
no imbalance of power. In fact, in this
matter, despite the
applicant’s counteroffer to earnings and benefits the first
respondent was offered by the second respondent,
he flatly refused
any counteroffer. This is so in circumstances where he knows that
almost 42% of the applicant’s business
was generated from
customer relationships which the first respondent managed,
maintained, and developed for the applicant.
[79]
The restraint itself
will not last forever. It is in place for six months, a period which
does not appear excessive given the steps
the applicant needs to take
to protect its legitimate interests: that is, permit a replacement
salesperson to establish the same
relationships with the customers.
The first respondent could easily be placed in a different branch of
the second respondent that
is outside the restraint area. The first
respondent, for convenience and proximity to his family, does not
wish to be employed
in any other branch of the second respondent. The
restraint is not against public policy.
The first
respondent’s conduct of flagrantly breaching a restraint and
confidentiality agreement that he signed voluntarily
is against
public policy
. Worse, he
wants to legitimise unlawful use of the applicant’s proprietary
information for his and the second respondent’s
business
because, according to him, he used the second respondent’s
trade secrets and customer information for the benefit
of the
applicant and the second respondent never restrained the applicant.
Two wrongs do not make a right. That being said, there
are no other
public policy issues that militate against enforcing the restraint.
On the contrary, there are public interests to
enforce the restraint.
Dispute
of facts in motion proceedings
[80]
In casu, the
applicant seeks a final interdict without resorting to oral evidence,
and the respondents contend that there are material
disputes of fact
that cannot be resolved on affidavits. They submit in their
heads of argument that the matter should be
referred to oral
evidence.
In
such a case, the general rule was stated by Van Wyk J (with whom De
Villiers JP and Rosenow J concurred) in
Stellenbosch
Farmers’ Winery Ltd v Stellenvale Winery (Pty) Ltd
[17]
to
be:
‘
...
where there is a dispute as to the facts a final interdict should
only be granted in notice of motion proceedings if the facts
as
stated by the respondents together with the admitted facts in the
applicant's affidavits justify such an order... Where it is
clear
that facts, though not formally admitted, cannot be denied, they must
be regarded as admitted.’
[81]
In
Plascon-Evans
Paints v Van Riebeeck Paints (Pty) Ltd
[18]
Corbett
JA held:
‘
It
seems to me, however, that this formulation of the general rule, and
particularly the second sentence thereof, requires some
clarification
and, perhaps, qualification
.
It is correct that, where in proceedings on notice of motion disputes
of fact have arisen on the affidavits, a final order, whether
it be
an interdict or some other form of relief, may be granted if those
facts averred in the applicant's affidavits which have
been admitted
by the respondent, together with the facts alleged by the respondent,
justify such an order.
[82]
The
power of the Court to give such final relief on the papers before it
is, however, not confined to such a situation. In certain
instances,
the
denial by respondent of a fact alleged by the applicant may not be
such as to raise a real, genuine or bona fide dispute of
fact
[19]
.
If in such a case the respondent has not availed himself of his
right to apply for the deponents concerned to be called
for
cross-examination under Rule 6 (5) (g) of the Uniform Rules of Court
and the Court is satisfied as to the inherent credibility
of the
applicant's factual averment, it may proceed on the basis of the
correctness thereof and include this fact among those upon
which it
determines whether the applicant is entitled to the final relief
which he seeks.
[20]
Moreover,
there may be exceptions to this general rule, as, for example,
where
the allegations or denials of the respondent are so far-fetched or
clearly untenable that the Court is justified in rejecting
them
merely on the papers
.’
[21]
[my emphasis].
[83]
The
respondent contends that since the applicant seeks final interdict
and there is a material dispute of facts, the matter should
be
decided based on the principle in
Plascon-Evans
[22]
that
where there is a genuine dispute of fact, the respondent’s
version must be accepted. The applicant, on the other
hand,
argues that the alleged dispute of fact is so far-fetched or so
clearly untenable because it is not genuine, and therefore,
the court
would be justified in rejecting it on the papers.
[23]
This exception to the usual position is allowed because motion
proceedings are quicker and cheaper, and it is in the interests
of
justice that dishonest respondents should not be permitted to shelter
behind patently implausible versions on affidavit or bald
denials.
The practice in this regard has rightly become more robust
[24]
.
[84]
However,
the test is not simply whether the respondent’s version is
improbable: in order to reject the respondent’s
version on the
papers, the test is the more stringent one, namely, whether the
respondent’s version is so far-fetched or
so clearly untenable
that the court may safely reject it on the papers
[25]
.
[85]
The applicant pleaded the existence of a validly executed
restraint and confidentiality agreement between it and the first
respondent,
including its terms and the breach thereof
.
The first respondent admits the existence and conclusion of the
restraint addendum, the terms and that the second respondent is
a
direct competitor to the applicant.
[86]
The
dispute lies in the contention by the respondents that the Top 15
customers are not the applicant’s proprietary interest
worthy
of protection by way of an interdict because these relationships were
cultivated by him and the second respondent over 15
years whilst in
the employ of the second respondent, not the applicant. The
applicant’s case is that even if the Top 15 customers
were
previously cultivated through the first respondent whilst in the
former employ of the second respondent, when the first respondent
became employed by the applicant, the former enhanced and/or
developed his relationship with the Top 15 customers over a period
of
22 months because his employment with applicant enabled him to do so.
As a result, a protectable proprietary interest was created
in favour
of the applicant. It is precisely because of that protectable
interest that the applicant committed the first respondent
to the
restraint and confidentiality undertakings.
Our
Courts have recognised that information of the type that the
applicants seek to protect in casu, is considered trade secrets
worthy of protection. In that regard, see, for example,
Sibex
Construction (SA) (Pty) Ltd and Another v Injectaseal CC and Others
.
[26]
[87]
I
find that the so-called disputed facts are not genuine and, as such
so far-fetched to safely reject it, as I hereby do, from the
papers.
In
any event, there was no application by the respondents to refer the
disputed facts to oral evidence to cross-examine the deponents
to the
applicant’s founding affidavit as envisaged in sub-rule
6(5)(g)
.
[27]
Requirements
for final interdict
[88]
The
requirements for a final interdict are trite.
[28]
Accordingly, in order to succeed, the applicant must establish such
requirements. These are (a) a clear right, (b) injury actually
committed or reasonably apprehended, and (c) the absence of similar
protection by any other ordinary remedy.
Clear
right
[89]
The
clear right to be proved is a right to which, if not protected by an
interdict, irreparable harm would ensue. Quite apart from
the right
to an interdict, the applicant should demonstrate a right that is
threatened by an impending or imminent irreparable
harm. It is a
right to which, if not protected by an interdict, irreparable harm
would ensue.
[29]
An interdict
is meant to prevent future conduct and not the past.
[90]
I am also of the view that the applicants do indeed have protectable
interests in the form
of customer connections and confidential
information. As was held by this Court in Experian and Sibex , there
are two kinds of
proprietary interests that can be protected by a
restraint of trade undertaking. The first is ‘the relationship
with customers,
potential customers, suppliers and others that go to
make up what is compendiously referred to as the “trade
connections”
of the business, being an important aspect of its
incorporeal property known as goodwill’. And the second is ‘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 competitive advantage’.
[91]
By all accounts, the first respondent, through his position at the
applicant’s business
in Epping and his previous history with
the clients, developed relationships with at least the Top 15
customers of the applicant
including others that fall outside the Top
15. A business’s customer connections are a proprietary
interest that can be protected
by a restraint of trade undertaking.
[92]
Accordingly, I find that the applicant has established a clear right
worthy of protection.
Irreparable
harm or reasonable apprehension
[93]
Where
a restraint is enforceable and the applicant has interests worth
protecting, it suffers irreparable harm if the restraint
is not
enforced.
[30]
[94]
The first respondent has relationships with customers of a nature
that he could induce them
to follow him to his new employment with
the second respondent, a direct competitor of the applicant. The
applicants set out in
some detail the strength of these relationships
with the customers of the applicants, developed in the exercise of
his duties.
All of this serves to show an employee with the knowledge
of the identity and requirements of the applicants’ customers
and
who had regular and repeated contact with the customers so as to
build up a connection in the course of trade with them.
[95]
The fact that the
second respondent never protected itself from siphoning of its former
customers by the first respondent does not
negate or nullify the
validity and enforcement of the restraint and confidentiality
undertakings.
Further, the fact that the first
respondent is alleged to be employed in the second respondent’s
fluid control business is
not bulletproof evidence that the restraint
and confidentiality undertakings would not be breached.
[96]
This is so because,
the respondents admit that it is possible for a fluid control
customer to purchase steel and tube products from
the second through
the first respondent. The risk of breach of the restraint and
confidentiality agreement by the respondents
is real.
[97]
In addition, the
respondents refused to sign the proposed exit agreement which would
have put in place safety measures to the satisfaction
of the
applicant that they will not breach the undertakings. I agree with
the applicant that the so-called employment of the first
respondent
by the second respondent in its fluid business section is a construct
aimed at undermining the restraint and confidentiality
agreement.
Moreover, it is not only the Top 15 customer information and contact
details that the applicant is concerned about,
but also other
applicant’s customer information to which the first respondent
had access by virtue of his employment with
the applicant.
[98]
The first respondent,
when he first informed the applicant of his employment offer from the
second respondent and subsequent discussion
in which he was offered a
better offer, had never disclosed that he would be employed in the
fluid control products section.
Further, the second
respondent has other branches outside the restraint area. The
first respondent could have been employed
in such other branches to
avoid breaching the restraint addendum, but insists on being employed
within the restraint area.
He agrees
that it is an available option, but he does not want to be far from
his family
.
[99]
The first respondent
is employed by a direct competitor within the restraint area.
I
find that the so-called non-competing role in which the first
respondent is employed (i.e., fluid control products) is aimed at
diverting this court’s attention from the real and genuine
issues in this application
.
This attempt to divert the court’s attention
failed
.
[100]
Accordingly, I find
the apprehension of harm is reasonable in the circumstances. That
being the case, if an interdict is not granted,
the harm that might
be inflicted on the applicant’s business would be irreparable
considering that the Top 15 customers and
other customers serviced by
the first respondent at the applicant’s business in Epping
accounted for more than 40% of the
applicant’s sales in revenue
and value.
Alternative
remedy
[101]
The
applicant has no alternative remedy other than to enforce the
restraint. An alternative remedy of damages “
is
cold comfort to an applicant that seeks to enforce a legitimate
restraint of trade covenant. By the time a damages claim
is
heard, the horse ha[s] bolted and harm is done. That harm is
very difficult to repair. I am satisfied that, where a restraint
of
trade is enforceable, the alternative remedy of a damages claim in
due course is more apparent than real
”
.
[31]
Conclusion
[102]
I am satisfied that the urgent application was properly set down
before me. The requirements for urgency were
met.
The
respondents have failed to discharge the onus resting on them to
prove that the restraint is unreasonable and thus unenforceable
.
As stated above, the restraint does not offend public policy and does
not unfairly restrict the first respondent’s constitutional
rights to practise his trade freely and or to earn a living.
[103]
For all of these reasons, I conclude that there can be no doubt that
customer contact exists and that the respondents
could exploit these
connections if employed by a competitor such as the second respondent
(which actually happened here).
This is the interest that the
applicant is entitled to protect by enforcing the restraint of trade.
Accordingly, the restraint should be enforced.
In the circumstances, I am satisfied that the order I made below is
just and equitable.
In
the result, I made the following order.
1.
The rules relating to forms, service, notices, and time periods, to
the extent necessary, are dispensed with
in terms of uniform rule
6(12).
2.
The matter is declared sufficiently urgent to be heard on an urgent
basis.
3.
The first respondent’s informal application to strike is
condoned.
4.
Application to strike out averments in the replying affidavit is
dismissed.
5.
Application to strike out “hearsay” evidence from the
replying affidavit is dismissed.
6.
The first respondent, for a period of six months, from 1 August
2025 (“the restraint period”),
is hereby interdicted and
prohibited from:
6.1
rendering services as an employee of the second respondent (Stewarts
and Lloyds Holdings (Pty)
Ltd).
6.2
being directly or indirectly involved with the second respondent
within a 250-kilometer
radius of the applicant's business premises
situate at 1[…] B[…] Avenue, Epping Industria, Cape
Town, Western Cape
(“the restraint area”).
6.3
marketing, selling, or supplying goods or services similar to those
of the applicant within
the restraint area and during the restraint
period.
7.
The second respondent is hereby interdicted and prohibited from
employing the first respondent within the restraint
area during the
restraint period.
8.
The first and second respondents jointly and severally, one paying
the other, be absolved to pay the costs
of the application, including
the costs of counsel, on scale C.
#
# P
NJOKWENI
P
NJOKWENI
# ACTING
JUDGE OF THE HIGH COURT
ACTING
JUDGE OF THE HIGH COURT
## Appearances
Appearances
Applicant
: G Elliot SC
First
Respondent
: P Tredoux
Second
Respondents : G
Samkange
[1]
East
Rock Trading 7 (Pty) Ltd and Another v Eagle Valley Granite (Pty)
Ltd and Others
(11/33767)
[2011] ZAGPJHC 196 (23 September 2011) at paragraphs [8] and [9].
(“East Rock”).
[2]
See:
Nelson Mandela Metropolitan Municipality v Greyvenouw
2004
(2) SA 81
(SE)
at 94C–D; Stock v Minister of Housing
2007
(2) SA 9
(C)
12I–13A.
[3]
East Rock, fn1
supra
at
paragraph [7].
[4]
Application
to strike is an application on notice. See
Abromowitz
v Jacquet and Another
1950 (2) SA 247
(W) at 251-2.
[5]
See
Thurgood v Dirk Kruger Traders (Pty) Ltd
1990 (2) SA 44
(E) at
48A-C.
[6]
See
Abramowitz v Jacquet
1950 (2) SA 247
(W) at 251-2.
[7]
Elher
(Pty) Ltd v Silver
1947 (4) SA 173
(W) at 178.
[8]
Experian
South Africa (Pty) Ltd v Haynes and Another
2013 (1) SA 135
(GSJ) at
paragraph [14]. (“Experian”).
[9]
Super
Safes (Pty) Ltd and Others v Voulgarides and Others
1975 (2) SA 783
(W) at 785E. (“Super Safes”).
[10]
Basson
v Chilwan and Others (supra) at 767G-H.
[11]
See Den
Braven SA (Pty) Limited v Pillay and Another
[2008]
3 All SA 518
(D)
at paragraphs [17] to [18].
[12]
Experian
(
supra
)
at paragraph [22].
[13]
Rawlins
and Another v Caravantruck (Pty) Ltd
[1992] ZASCA 204
;
1993 (1) SA 537
(A) at page
542G-I, (“Rawlins”).
[14]
Reddy
v Siemens Telecommunications (Pty) Ltd
2007 (2) SA 486
(SCA) at
paragraph [120] page 219, (“Reddy”).
[15]
Experian
at paragraph [21].
[16]
Magna
Alloys and Research (SA) (Pty) Ltd v Ellis
[1984]
ZASCA 116
;
1984
(4) SA 874
(A),
at 897F-898E (“Magna Alloys”).
[17]
Stellenbosch
Farmers' Winery Ltd v Stellenvale Winery (Pty) Ltd
1957 (4) SA 234
(C) at 235E – G. (“SFW”).
[18]
in
Plascon-Evans Paints v Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984 (3) SA 623
(A) at page 364H-I (“Plascon-Evans”).
[19]
see
Room Hire Co (Pty) Ltd v Jeppe Street Mansions (Pty) Ltd
1949 (3) SA
1155
(T) at 1163 - 5; Da Mata v Otto NO
1972 (3) SA 858
1984 (3) SA
p635
Corbett JA (A) at 882D – H.
[20]
Rikhoto
v East Rand Administration Board and Another
1983 (4) SA 278
(W) at
283E - H.
[21]
see
the remarks of Botha AJA in the Associated South African Bakeries
case, supra at 924A.
[22]
fn 18
supra.
[23]
Plascon-Evans
at 634E-635C; Wrightman t/a JW Construction v Headfour (Pty) Ltd and
Another
[2008] ZASCA 6
;
2008 (3) SA 371
(SCA) at para 12
[24]
Fakie
NO v CCII Systems (Pty) Ltd
[2006] ZASCA 52
;
2006 (4) SA 326
(SCA) paras 55-56
[25]
National
Scrap Metal v Murray and Roberts
2012 (5) SA 300
(SCA) paras 21-22
and cases cited therein
[26]
Sibex Construction (SA)
(Pty) Ltd and Another v Injectaseal CC and Others 1988 (2) SA 54 (T)
[27]
Sub-rule
6(5)(g) in provides:
‘
Where
an application cannot properly be decided on affidavit the court may
dismiss the application or make such order as it deems
fit with a
view to ensuring a just and expeditious decision. In particular, but
without affecting the generality of the aforegoing,
it may direct
that oral evidence be heard on specified issues with a view to
resolving any dispute of fact and to that end may
order any deponent
to appear personally or grant leave for such deponent or any other
person to be subpoenaed to appear and be
examined and cross-examined
as a witness or it may refer the matter to trial with appropriate
directions as to pleadings or definition
of issues, or otherwise.’
[28]
Setlogelo
v Setlogelo
1914 AD 221:
at 227.
[29]
National
Treasury v Opposition to Urban Tolling Alliance
2012 (6) SA 223
(CC)
para 50 (“OUTA”).
[30]
Esquire
System Technology v Cronje (2011) 32 ILJ 601 (LC) at paragraph [38].
[31]
Esquire
System Technology, supra, at paragraph [39].
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