Case Law[2025] ZAWCHC 516South Africa
Walsh and Others v Sinayan and Others (2025/168949) [2025] ZAWCHC 516 (7 November 2025)
Headnotes
Summary: Restraint of trade – First respondent retrenched by the third applicant. The first and second applicants buying back 15 per cent of the first respondent’s shares in the third applicant. Buying-back agreement incorporating a confidentiality and restraint of trade clause. Applicants seeking an interdict to restrain the first respondent from being employed by the second respondent. Restraint clause not triggered. Application dismissed.
Judgment
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# South Africa: Western Cape High Court, Cape Town
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## Walsh and Others v Sinayan and Others (2025/168949) [2025] ZAWCHC 516 (7 November 2025)
Walsh and Others v Sinayan and Others (2025/168949) [2025] ZAWCHC 516 (7 November 2025)
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sino date 7 November 2025
IN
THE HIGH COURT OF SOUTH AFRICA
WESTERN
CAPE DIVISION, CAPE TOWN
Case No:
2025-168949
In
the matter between:
MARY
JANE WALSH
First
Applicant
MATTHEW
PIUS WALSH
Second
Applicant
MAINLINE
CIVIL ENGINEERING
CONTRACTORS
(PTY) LTD
Third
applicant
and
KUMESHIN
SINAYAN
First
Respondent
TRENCHLESS
TECHNOLOGIES (PTY) LTD
Second
Respondent
KS
CIVIL ENGINEERING (PTY) LTD
Third
Respondent
Corum:
LEKHULENI J
Heard:
07
October 2025
Delivered:
Electronically on 07 November 2025
Summary:
Restraint
of trade – First respondent retrenched by the third applicant.
The first and second applicants buying back 15 per
cent of the first
respondent’s shares in the third applicant. Buying-back
agreement incorporating a confidentiality and restraint
of trade
clause. Applicants seeking an interdict to restrain the first
respondent from being employed by the second respondent.
Restraint
clause not triggered. Application dismissed.
JUDGMENT
LEKHULENI
J:
Introduction
[1]
The applicants seek final relief to enforce a contractual restraint
of trade and confidentiality
undertakings given by the first
respondent in favour of the third applicant (‘Mainline’).
The applicants seek enforcement
of the restraint until 22 May 2026
and throughout the Republic of South Africa. In addition, the
applicants seek an order interdicting
the first respondent from being
employed by or otherwise associated with the second respondent until
22 May 2026. The applicants
also seek a declaratory order that the
first respondent, Kumeshin, is in breach of the buy-back agreement,
which includes a restraint
of trade clause. This agreement was
entered into between Kumeshin and the directors of Mainline on 22 May
2024.
[2]
In terms of the buy-back agreement, the directors of Mainline, first
and second applicants,
bought back 15 per cent of Kumeshin’s
shares in Mainline. The buy-back agreement incorporated a restraint
of trade clause
to the effect that Kumeshin will not directly or
indirectly and whether for his own account, or as a principal,
compete or associate
with a company that competes with Mainline for a
period of two years from 22 May 2024. The applicants contend that
Kumeshin breached
this agreement by being employed by the second
respondent (Trenchless), a competitor of Mainline, in contravention
of the buy-back
agreement.
Preliminary
Point
[3]
At the hearing of this matter, the applicants applied for the joinder
of the third
respondent. The joinder application was premised on the
grounds that in the answering affidavit, Kumeshin stated that he is
the
sole director of KS Civil Engineering (Pty) Ltd (‘KS
Civil’). KS Civil entered into a service agreement with the
second
respondent, Trenchless in April 2025, a competitor of
Mainline. The applicants asserted that the restraint provisions
binding Kumeshin
precluded him from directly or indirectly being
associated with a competitor of Mainline. The joinder application was
not opposed.
The court determined that the relief requested by the
applicants against KS Civil involved the same questions of law and
fact as
those pertaining to the relief sought against Kumeshin.
Having considered the application and the pertinent issues that had
to
be decided, I decided to grant the applicants' application for the
joinder of KS Civil as the third respondent.
Material
background facts
[4]
Mainline is a civil engineering business established by the first
applicant in 1994.
It specialises in underground trenchless water and
sewer pipe rehabilitation and repair. Almost all of Mainline’s
work is
derived from government tenders. Amongst its varied pipe
rehabilitation services, Mainline offers two main types of pipe
rehabilitation
and repair solutions: Spirally wound pipelining
(‘SWP’) and cure-in-place pipe lining (‘CIPP’).
Both systems
aim to rehabilitate degraded pipes by inserting a
high-density polyethylene lining or fibreglass with resin as a liner
into a damaged
or degraded pipe.
[5]
The first respondent, Kumeshin, obtained an engineering degree at the
University of
Johannesburg in 2014 and became employed by Mainline as
a junior site manager in May 2015. He arrived at Mainline with no
prior
experience. In terms of clause 14 of his employment contract,
Kumeshin agreed that he would not during the currency of his
employment
with Mainline, or at any time after the termination
thereof, directly or indirectly use or disclose to any person, firm
or company
any information or secrets relating to processes used or
developed by Mainline, which he acquired in the course of his
employment
with Mainline. In 2021, 15% of the shares in Mainline were
sold to Kumeshin for R270,000. This sale consisted of 8% from the
first
respondent and 7% from the second respondent, both of whom are
directors of Mainline.
[6]
The applicants asserted that, unfortunately, shortly thereafter,
Kumeshin developed
a substance abuse problem. He attended rehab
several times and further received outpatient care. Mainline was
sympathetic about
Kumeshin’s drug addiction and supported his
attempts at recovery. However, he relapsed several times and Mainline
began to
be prejudiced by his inability to recover fully. After a
relapse in September 2023, Mainline took the difficult decision to
terminate
Kumeshin’s employment. During October 2023, Mainline
and Kumeshin entered into a termination agreement, pursuant to which
Kumeshin’s employment was terminated, and he received
compensation accordingly.
[7]
The parties thereafter negotiated the buy-back agreement of
Kumeshin’s shares
in Mainline. According to the applicants, the
negotiations were tough, and an agreement regarding the buy-back of
Kumeshin’s
shares in Mainline by the first and second
applicants was concluded on 22 May 2024. In terms of the buy-back
agreement reached
by the parties, the first and second applicants
purchased Kumeshin’s 15 per cent shares in Mainline for
R6,260,132.00. In
terms of the agreement, R534 070, 00 of the
purchase price would be held by Mainline’s auditors as a
retention to be
held in trust and paid with interest to Kumeshin if
Mainline did not within two years deliver a written notice to the
auditors
attaching a copy of a court order recording Kumeshin’s
breach of any of the provisions of the confidentiality and/or
restraint
provisions in the agreement.
[8]
The agreement also stipulated that the retention amount would be paid
to Mainline
if it delivered a written notice to the auditors within
two years, attaching a copy of a court order that recorded
Kumeshini’s
breach of any of the confidentiality and/or
restraint provisions in the buy-back agreement. In the event that the
retention was
not paid over to the auditors, Mainline accepted,
however, that provided Kumeshin is not in breach of the
confidentiality and restraint
provisions of the agreement, he is
entitled to payment thereof, plus interest, as of 22 May 2026.
[9]
The buy-back agreement incorporated both confidentiality and a
restraint of trade
clause. In terms of the confidentiality clause,
Kumeshin acknowledged, among other things, that by virtue of his
association with
Mainline he had access to commercially sensitive
information and secrets not available in the ordinary course of
business to a
competitor including: know-how, processes, techniques
and designs, knowledge of and influence over customers and business
associate
of Mainline; the names of existing and prospective
customers and their requirements and details of remuneration paid by
Mainline
to its employees and their respective duties. The applicants
contended that Kumeshin expressly undertook not to directly and
indirectly
divulge Mainline’s confidential information.
[10]
Furthermore, as to the restraint, Kumeshin agreed that Mainline had
protectable interests that
required protection. The first relates to
pricing. The applicants stated that Kumeshin knows exactly how
Mainline prices its work,
and particularly its tenders. According to
the applicant, Kumeshin knows exactly what Mainline’s operating
costs are, and
he knows what its profit margins are. Secondly, and
related to tenders, Kumeshin has developed considerable experience in
SWP and
CIPP work due to his eight years of employment with Mainline.
This experience is rare, and in the context of tenders, it is
particularly
significant. By taking all the SWP and CIPP experience
he has gained from Mainline to Trenchless, a competitor of Mainline
and
a new employer or associate of Kumeshin, the latter provides
Trenchless with an unfair advantage because it is automatically more
likely to submit a responsive bid and to be able to score higher than
before on functionality.
[11]
That advantage, according to the applicants, is unfair to Mainline
because it has paid Kumeshin
an enormous sum of money, in exchange,
in part, for him not joining a competitor like Trenchless for a
period of two years. To
this end, the applicants asserted that
Kumeshin undertook that he would not directly or indirectly and
whether for his own account
or as a principal, agent, partner, or as
representative for a period of two years and anywhere in South Africa
be interested or
engaged in any business that is competitive with or
carries on a business similar to Mainline business in particular
those listed
in annexure B to the buy-back agreement including
Trenchless.
[12]
It was agreed between the parties that should Kumeshin wish to take
up employment in any capacity
with any of the parties listed in
annexure B to the buy-back agreement, he will seek Mainline’s
permission, which would not,
in respect of the parties other than
those marked with X, be unreasonably withheld. Mainline would thus be
entitled to refuse requests
for permission in relation to the X list
without providing any reasons. According to the agreement, Kumeshin
was not entitled to
be associated with those parties for a period of
two years. The parties with an X next to their names were parties who
Kumeshin
and Mainline agreed would particularly benefit from the
confidential information possessed by him.
The
alleged breach of the buy-back agreement
[13]
The applicants asserted that Kumeshin decided to breach the
confidentiality and restraint provision
of the buy-back agreement by
taking employment with Trenchless. The applicants stated that they
discovered this on 28 August 2025
when one of Mainline’s
employees came across a notice from the Langeberg Municipality
advertising temporary traffic and pedestrian
disruptions in Robertson
owing to water pipeline rehabilitation work being undertaken by
Trenchless. The Langeberg Municipality’s
Notice referred to
Kumeshin as Trenchless’ Contracts Manager. Trenchless is a
direct competitor of Mainline, particularly
in relation to tenders.
According to the applicants, Trenchless is a competitor for which
Mainline requires special protection,
as agreed upon by both parties
in annexure B of the buy-back agreement.
[14]
Following the said discovery that Kumeshin is allegedly employed by
Trenchless, on 08 September
2025, Mainline’s attorneys
addressed a letter to Kumeshin and Trenchless, calling upon Kumeshin
to provide an undertaking
by 9 September 2025 that he will cease his
employment with Trenchless, and the letter to Trenchless served to
inform it of Kumeshin’s
alleged breaches. Kumeshin responded to
the said correspondence on 9 September 2025 in which, amongst others,
he denied being employed
by Trenchless. On 11 September 2025,
Trenchless’ attorneys addressed a letter to the applicant’s
attorneys denying
that Trenchless employed Kumeshin.
[15]
The applicants further stated that it may well be true that
Trenchless does not employ Kumeshin
– he may be a
subcontractor, a consultant, or an agent. But he is clearly
associated with Trenchless in a manner prohibited
by the buy-back
agreement, and these facts entitle the applicants to the relief
sought in the Notice of Motion. Moreover, the applicants
submitted
that, in terms of the restraint provision, Kumeshin may not be
interested in, engaged in, concerned with, or associated
with any
business that is competitive with or carries on a business similar to
the Mainline business.
[16]
The applicants contended that Kumeshin is in breach of both the
confidentiality provision and
the restraint provision. In this
regard, the applicants asserted that they are entitled to an
interdict preventing Kumeshin from
working for Trenchless for the
time remaining on his restraint, that is, until 22 May 2026.
[17]
The applicants believed that they had demonstrated a clear right to
this relief, as well as the
apprehended injury. In the applicants’
view, they do not have a suitable alternative legal remedy. While
they're entitled
to keep their retention of R5 340 70, 00 referred to
in paragraph above 7 in the event of Kumeshin’s breach, this is
a wholly
insufficient remedy which does not in law serve to deprive
the applicants of their interdictory relief against either Kumeshin
or Trenchless. The applicants asserted that they are entitled to a
declarator to the effect that Kumeshin is in breach of the
confidentiality
and restraint provisions of his buy-back agreement.
[18]
The applicants also averred that this matter is urgent, as they only
discovered Kumeshin’s
employment or association with Trenchless
on 28 August 2025, and took immediate steps to consult with their
attorneys. Letters
were quickly dispatched, and this application was
delivered a few days after responses were received from Kumeshin and
Trenchless.
The applicants believe that their rights must be
protected and that the relief sought should be granted as soon as
possible. According
to the applicants, any delay will prejudice the
applicants even further than they have already been prejudiced.
The
first respondent’s (Kumeshin) case
[19]
Kumeshin opposed the application and challenged, among others, the
urgency with which it was
brought. Kumeshin submitted that the
applicants lack sustainable grounds for having the matter heard on an
urgent basis. First,
Kumeshin believes that the applicants’
truncation of the time periods is unreasonable. He complained that
the application
was launched under Rule 6(12) of the Uniform Rules on
18 September 2025 and served on him later that same day. In terms of
the
Notice of Motion, he was directed to give notice of intention to
oppose by 22 September 2025 and deliver his answering affidavit
on 26
September 2025. This left him with just over a week within which to
appoint and consult with his legal representatives and
have them
prepare his answering affidavit. Kumshin denied that this gives the
respondents sufficient and proper time to prepare
their papers.
[20]
Secondly, Kumeshin asserted that the weakness of the applicants’
case mitigates against
an urgent hearing. Kumeshin contends that the
applicant’s claims are speculative and based on a mistaken
assumption that
it has not done due diligence on. On the merits of
the matter, Kumeshin stated that he is a qualified civil engineer
with a degree
in engineering from the University of Johannesburg. He
confirmed that Mainline employed him in May 2015. In August 2016, the
first
and second applicants offered him a 15 per cent membership
interest in Mainline due to his business acumen and ability to run
the
business independently of them. He purchased his 15 per cent
membership interest for R270 000, which was based on the fair value
of such shares at a 10 per cent discount. Between 2015 and 2017,
Mainline operated at a net loss. Despite Mainline running at a
loss,
throughout 2015 and 2017, he became responsible for running Mainline
operations, as the first and second applicants were
retired and not
Mainline employees. Their contribution to the business was mainly
financial.
[21]
After 2018, Mainline began making a profit and growing its
operations. According to Komeshin,
the applicants have received a
substantial benefit from the efforts that he made. Kumeshin
acknowledged that at one stage he voluntarily
attended the
rehabilitation program for substance abuse; however, he denied that
it impacted upon the performance of his duties
with Mainline.
Kumeshin believes that the applicants have exaggerated the issue into
being the cause of their decision to terminate
his employment.
According to him, the true circumstances for his retrenchment were
that there had been discussions regarding a
proposed buyout of the
first and second applicants’ membership interests from Mainline
by him and his colleague, Mr Spreckley.
[22]
When he decided against being involved with this, it led to personal
issues and a falling out
between them. On 5 September 2023, he was
served with a section 189(3) retrenchment notice in terms of the
Labour Relations Act 66 of 1995
. On 11 October 2023, he signed a
settlement agreement regarding the termination of his employment with
Mainline based on operational
requirements. At that point, he was
still a member of Mainline, despite the other members trying to force
him to sell his membership
interest. He believed his retrenchment was
a means to drive him out of Mainline cheaply, but he refused to sell
his equity for
less than fair value. Kumeshin maintained a 15%
membership interest in Mainline until 22 May 2024, when the buy-back
of his shares
agreement was concluded. Up until May 2024, he made
multiple requests to the first and second respondents to provide him
with Mainline’s
most recent financial records.
[23]
Although the applicants accepted that he was entitled to Mainlaine’s
accounting records,
this ultimately did not happen, which prevented
him from making an accurate valuation of his equity. Due to not
having access to
the most recent Mainline’s financial records,
he was unable to estimate a more updated value, nor could he dispute
the value
of the applicants’ buy-back offer of R6,260,132. 00,
which was presented as a take-it-or-leave-it offer. Due to financial
constraints, he faced at the time, he had no choice but to accept the
applicant's offer and, on 22 May 2024, he signed the buy-back
agreement annexed to the applicant’s funding affidavit.
[24]
Since his retrenchment in October 2023, he received several offers of
employment from Mainline’s
competitors, who offered him a
similar salary to what he was receiving at Mainline. He did not want
to breach the restraint agreement
and declined such offers. After
concluding the buy-back agreement, he got married in June 2024. Given
that he had not been working
since October 2023, he had to carefully
consider his options for earning a living to sustain his family while
having the restraint
clause hanging over his head. He asserted that
he does not come from wealth, nor does he have exorbitant amounts of
money, which
would enable him to sit at home and not earn a living.
After some thought, he decided to use the funds from the sale of his
membership
interest to purchase equipment and pay off debt, so that
he could start his own independent business, of hiring out equipment
and
providing labour.
[25]
In July 2024, he registered KS Civil, the third respondent, as a
company under his directorship.
KS Civil’s ordinary course of
business involves supplying plant, equipment, and labour to other
businesses. It does not perform
specialist rehabilitation services,
nor does it have specialist equipment. It simply provides general
plant equipment and labour.
It also does not qualify for the tenders
which Mainline tenders on. KS Civil employs approximately 40 staff
members and owns plant
and equipment, including TLBs, tipper trucks,
dumpers, rollers, trailers, and a generator.
[26]
Kumeshin asserted that KS Civil and Trenchless entered into a service
provider agreement in April
2025 specifically for the supply of
equipment and labour to its business. The agreement is a standard
service provider arrangement
which specifies that KS Civil will
render support services, specifically the hire of plant and
equipment, provision of labour,
and related logistical assistance.
According to Komeshin, the scope of work and responsibilities does
not extend to any services
provided by Mainline nor to any of its
trade secrets described in the buy-back agreement. However, this
agreement with Trenchless
may sometimes require him to attend a site
solely to manage his own staff and equipment.
[27]
Kumshin drew the court’s attention to clause seven of the
service provider agreement with
Trenchless, which states that nothing
in it shall be construed as creating a partnership, joint venture,
agency, or employment
relationship between KS Civil and Trenchless.
Kumeshin asserted that KS Civil’s business is distinct from the
applicants’
specialist rehabilitation business. All his staff
remain KS Civil employees. All plant equipment remains under KS
Civil’s
ownership and control. The service it provides to
Trenchless cannot amount to unlawful employment or association.
Kumeshin denied
that he had disclosed or misused any confidential
information from Mainline for the advancement of Trenchless.
According to him,
KS Civil’s work is independent. At no point
in time had he ever procured tenders or projects for Trenchless.
Kumeshin implored
the court to dismiss the applicant’s claim
with costs.
The
second respondent’s (Trenchless) case
[28]
Trechless also opposed the applicants’ application. Trenchless
noted that the applicants
do not seek any substantive relief against
it in terms of their notice of motion. According to Trenchless, the
only relief sought
by the applicants against Trenchless is a prayer
for costs on an attorney and client scale. However, this was disputed
during argument
by Mr Baguley, counsel for the applicants, who
submitted that the interdictory relief sought by the applicants is
against all three
respondents. Trenchless asserted that Kumeshin’s
employment contract does not contain a restraint undertaking in
favour of
Mainline.
[29]
Trenchless asserted that, in terms of the buy-back agreement,
Kumeshin appears to have given
a restraint undertaking in terms of
clause eight thereof, in favour of Mainline; however, Trenchless is
not a party to the buy-back
agreement and accordingly did not incur
any obligation towards either Mainline or the first and second
applicants in terms of the
buy-back agreement. Trenchless noted the
applicants’ assertion that Kumeshin expressly undertook not to
directly or indirectly
divulge Mainline’s confidential
information and that he would not directly or indirectly use or
disclose any information
or secrets relating to processes developed
by Mainline.
[30]
Trenchless denied the applicants' claim that Kumeshin was ever
employed by them. In addition,
Trenchless asserted that although it
was appointed as the main contractor by the Langeberg Municipality,
as alluded to by the applicants
in their founding affidavit, it
appointed a service provider by the name of KS Civil, the third
respondent herein, to assist them.
At no stage was Trenchless or its
management aware of Kumeshin’s confidentiality undertaking and
restraint undertaking in
favour of Mainline when KS Civil was
appointed as a service provider.
[31]
Trenchless disputed that Kumeshin shared Mainline’s
confidential information with it. Furthermore,
Trenchless stated that
the applicants failed to demonstrate an entitlement to any relief
against it in terms of a delictual claim
based on unlawful
competition, nor are there any averments about the elements of such
delictual claim in the founding affidavit.
Moreover, Trenchless
stated that it is not aware of the nature and description of the
third applicant’s confidential information,
nor can it be said
that Kumeshin in any way shared such confidential information with
Trenchless.
[32]
Furthermore, Trenchless submitted that it is immaterial whether
Kumeshin is in breach of his
confidentiality undertakings and
restraint undertakings towards Mainline, as far as Trenchless is
concerned. According to Trenchless,
the fact of the matter is that
the applicants have not demonstrated entitlement to any relief, let
alone an order for costs against
Trenchless, whether in terms of
unlawful competition or otherwise. To this end, Trenchless asserted
that the conduct of the applicants
is none other than vexatious and
frivolous, particularly since the applicants were afforded the
opportunity after it had already
instituted an application to abandon
the cost order sought against Trenchless. Instead, the applicants
chose to persist with the
application against Trenchless.
[33]
Accordingly, Trenchless sought the dismissal of the applicants’
application with costs
on an attorney and client scale, including the
costs of counsel on scale C, against the applicants jointly and
severally, with
the one paying the other to be absolved.
Principal
submissions by the parties
[34]
Mr Baguley, counsel for the applicants, submitted that this matter is
urgent. Counsel submitted
that the applicants only discovered
Kumeshin’s employment or association with Trenchless on 28
August 2025 and took immediate
steps to consult with their attorneys.
Counsel submitted that letters of demand were quickly dispatched, and
this application was
subsequently prepared and launched. In counsel’s
view, there is accordingly no prospect of any redress if the
applicants
are forced out of the urgent lane.
[35]
On the merits of the application, Mr Baguley submitted that Kumeshin
admitted that by virtue
of his association with Mainline, he had
access to commercially sensitive information and secrets not
available in the ordinary
course of business to a competitor. Counsel
further submitted that Kumeshin agreed that Mainline had a
protectable interest and
that he would not directly or indirectly or
whether for his own account or as a principal or agent or other
association of any
nature for a period of two years and anywhere in
South Africa be interested or engage in, or associated with any
business that
is competitive with or carries on a business similar to
the Mainline business and, in particular, those listed in annexure B
to
the buy-back agreement which includes Trenchless.
[36]
Counsel submitted that Kumeshin’s detailed knowledge of
Mainline’s business gives
rise to the prospects of unlawful
competition by competitors, including Trenchless, because Kumeshin
knows exactly how Mainline
prices its work, and particularly its
tenders. He can accurately state what Mainline’s price will be
in any tender. Mr Baguley
submitted that this knowledge provides
competitors, including Trenchless, with an obvious unfair advantage.
In addition, Kumeshin
has, due to his eight years of employment with
Mainline, developed extensive experience in SWP and CIPP work. By
leveraging the
extensive knowledge, he has gained in SWP and CIPP at
Mainline, Kumeshin gives Trenchless a significant unfair advantage.
Counsel
submitted that this experience increases the likelihood of
Trenchless submitting a competitive bid and achieving higher scores
in functionality than before.
[37]
Mr Baguley submitted that, notwithstanding Kumeshin’s very
substantial compensation, he
has breached the confidentiality and
restraint provisions of the buy-back agreement and the
confidentiality provision of his employment
contract. According to Mr
Baguley, even if the applicants fail on the restraint relief, the
court should grant the declaratory
relief against Kumeshin for
breaching the restraint clause. Counsel prayed for an order sought in
the notice of motion.
[38]
Mr Loubser, counsel for the first and third respondents, submitted
that, based on nothing more
than the Langberg Municipality’s
notice, the applicants assumed that Trenchless had employed Kumeshin.
Counsel argued that
the applicants launched this application based on
that mistaken assumption. Mr Loubser argued that Trenchless does not
employ Kumeshin.
His business, KS Civil, has a service provider
agreement with Trenchless. According to counsel, this is not
employment in any capacity
and thus does not trigger the requirement
that Kumeshin should seek Mainline’s permission.
[39]
Mr Loubser further submitted that Kumeshin does not deny that he
gained knowledge from Mainline
and that Mainline has a protectable
interest. However, Kumeshin denies that the applicants’
interests are at risk or being
prejudiced. Furthermore, counsel
submitted that there is no evidence on the papers that Kumeshin has
divulged any confidential
information. Even though Mainline and
Trenchless are competitors, so the contentions proceeded, the scope
of KS Civil’s service
provider agreement with Trenchless is
limited to the supply of general plant equipment and labour, not
specialist equipment. It
does not involve the potential to share
confidential information.
[40]
Counsel for Kumeshin submitted that the applicants maintain that
Kumeshin can state with complete
accuracy what Mainline’s price
will be in any tender. In counsel's view, this hyperbole is hard to
believe. Mr Loubser contended
that two years have passed since
Kumeshin was retrenched from Mainline. Any knowledge Kumeshin still
has about the business is
more limited than then, if not outdated and
irrelevant altogether. In addition, Mr Loubser contended that the
restraint is overbroad
due to its geographic extent covering the
whole of South Africa. In counsel’s view, the applicants did
not motivate for the
application of the restraint in the whole of
South Africa in their founding papers or otherwise. To this end,
counsel implored
this Court to dismiss the applicants’
application with costs.
[41]
On the other hand, Mr Montzinger, counsel for Trenchless, submitted
that no substantive relief
is sought against Trenchless by the
applicants, except for an order for costs, on a punitive scale of
attorney and client. Mr Montzinger
submitted that there is simply no
case for Trenchless to meet on the applicants’ founding
affidavit, whether for an order
for costs or otherwise. Counsel
argued that Trenchless is not a party to the restraint of trade
undertakings given by Kumeshin
in favour of Mainline. Trenchless is
accordingly not bound thereby and is not subject to any obligation in
terms thereof, whether
on Mainline or otherwise.
[42]
Although Trenchless indirectly enlisted the services of Kumeshin
through a service provider,
KS Civils (Pty) Ltd, in counsel’s
opinion, it did so without the knowledge of the historical
relationship between Kumeshin
and Mainline. It was certainly not
aware of the restraint undertakings given by Kumeshin in terms of the
buy-back agreement with
the first and the second applicants. Mr
Montzinger further submitted that there is no suggestion whatsoever
that the applicants
seek to hold Trenchless liable, whether for costs
or otherwise, in terms of a delictual claim premised upon unlawful
competition.
To this end, counsel argued that Trenchless was
accordingly put to the unnecessary effort and expense of having to
enter the fray
only to defend itself against a claim devoid of any
merit. To this end, Mr Montzinger prayed for the dismissal of the
applicants’
application with costs on an attorney and client
scale, including the costs of counsel on scale C.
Issues
to be decided
[43]
From the above discussion, this Court is enjoined to decide,
first
,
whether the applicants’ application is urgent as envisaged in
Rule 6(12) of the Uniform Rules.
Secondly
, whether the
Kumeshin breached the buy-back agreement incorporating a restraint of
trade agreement concluded on 22 May 2024.
Thirdly
, whether
Kumeshin should be interdicted from being employed by or being
otherwise associated with Trenchless until 22 May 2026.
For the sake
of completeness, I will discuss these disputed issues sequentially,
starting with the question of urgency.
Urgency
[44]
As foreshadowed above, Kumeshin impugned the truncated timeline
afforded to the respondents to
file their answering affidavits.
Kumeshin does not contend that the matter is not urgent; he only
complains that the applicants’
timetable has not provided him
with sufficient opportunity to answer the case. Trenchless did not
place urgency in dispute at all.
As correctly pointed out by Mr
Baguley, Kumeshin is wrong. He had eight days to complete his
affidavit. The application was served
on him on 18 September 2025,
and he delivered his answering affidavit on 26 September 2025.
[45]
Significantly, the applicants are enforcing a restraint of trade
covenant. It is trite that proceedings
for the enforcement of a
restraint of trade agreement are usually, by their very nature,
urgent.
[1]
Restraint of trade
agreements invariably seek to interdict ongoing unlawful action in
respect of which an applicant continues to
suffer financial losses,
which are notoriously difficult to quantify or to recover by way of
action.
[2]
While the
confidentiality provisions the applicants rely on are not limited as
to time, the restraint of trade the applicants rely
on comes to an
end by the effluxion of time on 22 May 2026.
[46]
In my opinion, the applicants’ application is urgent,
especially considering that they
are entitled to retain the sum of
R534,070.00 as a retention, on condition they secure a court order by
22 May 2026, that Kumeshin
breached the restraint clause. If they are
removed from the urgent court, a decision on whether they should keep
the amount of
R534,070.00 would not be made within the required
timeframe. Therefore, the argument that this matter is not urgent
must fail.
This leads me to the second disputed issue of whether
Kumeshin breached the buy-back agreement, which incorporated a
restraint
of trade agreement concluded on 22 May 2024. However,
before I consider this question, I deem it expedient to briefly set
out the
legal principles applicable in restraint of trade agreements.
Legal
principles applicable to agreements in restraint of trade
[47]
The landmark case on this subject is
Magna
Alloys and Research (SA) (Pty) Ltd v Ellis
,
[3]
which introduced a significant change to the courts' approach to
agreements in restraint of trade by declining to follow earlier
decisions based on English precedent that an agreement in restraint
of trade is prima facie invalid and unenforceable. In English
law, a
party seeking to enforce such an agreement must show that the
restraint is reasonable as between the parties, while the
burden of
proving that it is contrary to public policy is incumbent on the
party alleging it.
[48]
The
Magna Alloys
judgment reversed this approach and held that
agreements in restraint of trade were valid and enforceable unless
they are unreasonable
and thus contrary to public policy, which
necessarily as a consequence of their common-law validity, has
the effect that
a party who challenges the enforceability of the
agreement bears the burden of alleging and proving that it is
unreasonable. The
Court summarised the legal position,
inter alia,
as follows:
48.1
There is nothing in our common law which states that a restraint of
trade agreement is invalid or unenforceable.
48.2 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.
48.3 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.
48.4 In
our law the enforceability of a restraint should be determined by
asking whether enforcement will prejudice
the public interest.
48.5
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.
[4]
[49]
As foreshadowed above, the principle laid down in
Magna
Alloys
is that a restraint of trade clause is enforceable unless it is shown
to be unreasonable, which necessarily casts an onus on the
person who
seeks to escape it. In the present matter, if the facts disclosed in
the affidavits, as I have described in the material
background facts
above, disclose that the restraint is reasonable, then Mainline must
succeed in its relief; if, on the other hand,
those facts disclose
that the restraint is unreasonable, then Kumeshin must succeed. These
two dichotomous questions call for a
value judgment.
[5]
[50]
In
Reddy
v Siemens Telecommunications (Pty) Ltd
,
[6]
the Supreme Court of Appeal held that the Court must make a value
judgment with two principal policy considerations in mind in
determining the reasonableness of a restraint.
[7]
The first is that the public interest
[8]
requires parties to comply with their contractual obligations, a
notion expressed by the maxim
pacta
servanda sunt
.
[9]
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.
[10]
[51]
A restraint would be unenforceable if it prevents a party after
termination of his or 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.
[11]
Simply put, when
considering the enforceability of a covenant in restraint of trade,
the most important question is whether the
covenant protects a
legitimate proprietary interest on the part of the covenantee. Our
law adopts the view that it will be contrary
to the public interest
to enforce a ‘naked’ restraint of trade that fails to
protect any legitimate proprietary interest
on the part of the
covenantee but seeks merely to exclude competition by the
covenantor.
[12]
[52]
In
Basson
v Chilwan and Others,
[13]
the court identified four questions that should be asked when
considering the reasonableness of a restraint:
(a)
Does
the one party have an interest that deserves protection after
termination of the agreement?
(b)
If
so, is that interest threatened by the other party?
(c)
In
that case, does such interest weigh qualitatively and quantitatively
against the interest of the other party not to be
economically inactive and unproductive?
(d)
Is
there an aspect of public policy having nothing to do with the
relationship between the parties that requires that the
restraint be
maintained or rejected? Where the interest of the party sought to be
restrained weighs more than the interest to be
protected, the
restraint is unreasonable and consequently unenforceable. The enquiry
undertaken at the time of enforcement covers
a wide field. It
includes the nature, extent, and duration of the restraint, as well
as factors peculiar to the parties and their
respective bargaining
powers and interests.
[14]
[53]
Having set the applicable legal principles in this matter, I turn to
consider the remaining disputed
issues between the parties. However,
as a point of departure, I must emphasise that the restraint
agreement entered between the
applicants and Kumeshin, in my view,
stands on a different footing. It must be stressed that the
employment contract of Kumeshin
did not have a restraint of trade
clause. As correctly pointed out by Mr Loubser, the restraint
agreement was concluded seven months
after Kumeshin’s
retrenchment in terms of a termination agreement that contained no
restraint clause. The seven-month period
represented a clean break
between Kumeshin’s time as a Mainline employee and thereafter,
when he was only a Mainline shareholder.
[54]
Simply put, at the time when the buy-back agreement was concluded,
incorporating a restraint
clause, Kumeshin was no longer an employee
of Mainline for a period of seven months. Furthermore, the
termination agreement did
not incorporate the restraint clause.
Clearly, the buy-back agreement, which incorporated the restraint
clause, was concluded in
the context of Kumeshin being a shareholder
of Mainline, rather than in an employment context. Notwithstanding,
it remains to be
determined whether the restraint is reasonable and
can thus be enforced.
Did
Kumeshin breach the restraint clause?
[55]
In determining this question, it is important to consider the four
questions postulated by Nienaber
JA, as he then was, in
Basson v
Chilwan and Others
, discussed in paragraph 52 above. The first
question is whether Mainline has a protectable interest that deserves
protection. In
brief, it is common cause that Kumeshin gained
knowledge from Mainline and that Mainline, the third applicant herein
has a protectable
interest. Kumeshin has admitted this, and it is not
in dispute. The question that follows is whether Kumeshin’s
association
with Trenchless threatens that protectable interest. I
turn to consider that question in the discussion that follows.
Is
Mainline’s protectable interest threatened by Kumeshin’s
association with Trenchless?
[56]
To determine this question, it is necessary to examine the restraint
of trade clause closely.
The restraint clause is contained in
paragraph 8 of the buy-back agreement under the heading ‘Restraint’.
The relevant
part of that clause provides as follows:
8.3
“Kumeshin shall not directly or indirectly, and whether for his
own account, or as
a principal, agent, partner, representative,
shareholder, director, executive, consultant, contractor, financier,
assistant, administrator,
adviser, officer or holding any other
capacity whatever in relation to any person, syndicate, partnership,
joint venture, company,
business undertaking, concern or other
association of any nature for a period of two years after the
signature date and anywhere
in the RSA-
8.3.1
be interested or engaged in, concerned or associated with any
business that is competitive with or carries
on a business similar to
the Mainline business.
8.3.2
canvas, solicit or entice, or endeavour to entice in respect of any
business that is competitive with the
Mainline business, any person
who is at the signature date and the closing date or, during a period
of two years prior to the signature
date was a customer, supplier or
distributor of the Mainline business or is or was accustomed to
dealing with Mainline, specifically
including (without limitation)
those parties listed on Annexure B. Should Kumeshin wish to take up
employment in any capacity with
any of the parties listed on Annexure
B, he shall seek permission from Mainline which, other than those
parties marked with an
‘X’ shall not be unreasonably
withheld.”
[57]
The restraint agreement targets business activities which is
competitive with or similar to the
Mainline business. Evidently,
clause 8.3 prohibits being associated with any business that is
competitive with or carries on a
business similar to the Mainline
business. The restraint agreement does not apply to employment with
entities which do not themselves
compete with Mainline. The
applicants referred the court to three aspects of its protectable
interests, namely Kumeshin’s
knowledge of pricing, his
experience in SWP and CIPP work-related tenders, and his knowledge of
Mainline’s operations.
[58]
Kumeshin has denied being employed by Trenchless, a competitor of
Mainline. In this regard, he
has denied that the applicants’
protectable interests are at risk or threatened. In my view, there is
no evidence on the
papers that Kumeshin has divulged any confidential
information to Trenchless. Kumeshin registered KS Civil as a company
whose ordinary
course of business entails the supply of plant,
equipment, and labour to other businesses. KS Civil does not provide
specialist
rehabilitation services, such as SWP or CIPP, nor does it
possess specialised equipment. It also does not qualify for the
tenders
which Mainline tenders on.
[59]
From the affidavits filed, the nature of Kumeshin’s current
work with KS Civil differs
from Mainline. It purely concerns the
supply of general plant equipment and labour. It does not involve
specialist equipment or
knowledge that poses a risk of sharing or
exploring Mainline’s confidential information. In my view,
there is nothing in
the papers suggesting that Trenchless employs
Kumeshin. I am mindful of the notice dated 23 July 2025 from
Langeberg Municipality,
which identifies Kumeshin as a Contracts
Manager which underpins the applicants’ application. Kumeshin
denied that he is
a Contracts Manager of Trenchless. Trenchless has
also corroborated this version. Kumeshin asserted that he only
manages KS Civil
employees and equipment on site. Trenchless as well
denied that Kumeshin is an employee of theirs.
[60]
It is crucial to approach the interpretation of the notice from the
Langeberg Municipality with
precision and care. To suggest that the
reference to the Contracts Manager in the notice intrinsically
implies that Kumeshin is
working for Trenchless, the primary
contractor, would be an overly broad assumption. Kumeshin has clearly
indicated that he is
involved in the project on-site, collaborating
with his team to supply both labour and essential plant equipment.
Even though Mainline
and Trenchless are competitors, the scope of KS
Civil’s service provider agreement with Trenchless is limited
to the supply
of general plant equipment and labour, not specialist
equipment. It does not involve the potential to share confidential
information.
Furthermore, given that KS Civil operates as a service
provider to other entities, the possibility that KS Civil will
divulge Mainline’s
confidential information to Trenchless is
not a reasonable or probable one.
[61]
It has been argued that in establishing KS Civil and entering into a
service provider agreement
with Trenchless, Kumeshin has clearly
breached the buy-back agreement. This argument is predicated on the
premise that the buy-back
agreement prohibits Kumeshin from engaging
in any direct or indirect association with a competitor of Mainline
for a duration of
two years. To the extent that the buy-back
agreement prevents Kumeshin from having any direct or indirect
association with a competitor
of Mainline, I consider that the
restraint clause is overly broad, legally incompetent, and
unenforceable. It suggests that, for
the sake of argument, Kumeshin
cannot to perform tasks necessary for him to earn a living, such as
keeping books of accounts for
companies that are in competition with
the applicant. Such an association has no connection to the
applicant's protected interests.
In my opinion, this limitation is
inconsistent with public policy and should not be enforced. I will
shortly provide an evaluation
in the discussion below, demonstrating
that this restraint clause is excessively broad, contravenes public
policy, and is, consequently,
unenforceable. In my view, there is no
legitimate threat or harm to the applicants’ protectable
interests.
Does
the applicants' protectable interest outweigh, qualitatively and
quantitatively, Kumeshin’s interest to be economically
active
and productive?
[62]
The applicant avers that Kumeshin’s restraint of trade
agreement does not preclude him
from working. Mr Baguley submitted
that if Kumeshin wanted to work or associate with entities in
annexure B, he had to seek permission
from Mainline, whose consent
shall not be unreasonably withheld. It must be borne in mind that
Kumeshin’s employment with
Mainline was not terminated of his
own account, but he was retrenched following a consultation process
in terms of
section 189
of the
Labour Relations Act 66 of 1995
.
[63]
The restraint clause is significantly detrimental to Kumeshin. It is
crucial to note that the
relationship between the parties has
deteriorated irreparably, which led to the retrenchment of Kumeshin.
Moreover, the discussions
and negotiations concerning the buy-back
agreement have been quite vigorous. It is unlikely that the
applicants would consent to
Kumeshin being employed by their
competitors, as the primary purpose of the restraint agreement was to
prevent such employment.
Given these circumstances, it is
unreasonable for Kumeshin's employment prospects to be contingent
upon the discretion of the applicants.
[64]
Furthermore, it is not in dispute that after he was retrenched,
Kumeshin remained unemployed
for several months. Kumeshin stated that
he received several offers of employment from Mainline’s
competitors, who offered
him a similar salary to what he received at
Mainline. However, he did not want to breach his restraint and
declined such offers.
Since the buy-back agreement was concluded, his
freedom to earn a living that uses his skills and expertise in the
engineering
industry has been restricted. He had to consider his
options carefully to make a living that would sustain his family
without breaking
the restraint clause.
[65]
After some thought, he decided to use the funds from the sale of his
membership interest to purchase
equipment and pay off debt, so that
he could start his own independent business, hiring out equipment and
providing labour. This
was not a service that Mainline provides, nor
was it in violation of the restraint agreement. In starting KS Civil,
he opted to
focus on a narrow scope of work, hiring out of general
equipment and labour. In my opinion, it would be unfairly prejudicial
to
Kumeshin to enforce the restraint and further limit his ability to
earn a living, especially since he is already operating within
a
narrow scope and not practising the profession for which he studied
for.
[66]
Kumeshin is a civil engineer. From the documents submitted, Kumeshin
is 33 years old. KS Civil
is currently his sole source of income and
the only way he can be economically productive. The applicants seek
to interdict Kumeshin
until 26 May 2026 from practising his
profession, the only trade in which he is qualified and from doing
business through KS Civil.
The work of KS Civil has no connection to
the protectable interest of the applicants. In my view, enforcing the
restraint of trade
in these circumstances would cause significant
harm to Kumeshin and would no doubt render him destitute. This will
not only harm
him but also the thirty employees and their families
who work for his company – KS Civil.
[67]
Moreover, the applicants’ allegations that Kumeshin is employed
by Trenchless or is a subcontractor
or a consultant of Trenchless is
based on speculation and conjecture. Both Kumeshin and Trenchless
have denied that Kumeshin is
employed by the second respondent. The
notice from Langeberg Municipality does not on its own, without more,
prove that Kumeshin
is employed by Trenchless. The applicants did not
submit any document from the Langeberg Municipality to indicate on
what basis
they referred to Kumeshin as the Contracts Manager of the
Trenchless.
[68]
It is my firm view that Kumeshin’s right, protected in section
22 of the Constitution of
the Republic of South Africa, to choose his
trade, occupation, and profession freely would be severely affected
if the restraint
is enforced. The freedom to choose a vocation is
intrinsic to the nature of a society based on human dignity, as
contemplated by
the Constitution. One's work is part of one's
identity and is constitutive of one's dignity.
[15]
Every individual has a right to take up any activity which he or she
believes himself or herself prepared to undertake as a profession
and
to make that activity the very basis of his or her life.
[69]
In the founding and replying affidavits, the applicants stated that,
notwithstanding Kumeshin’s
staggering compensation of R7.5
million he received when he left Mainline, he decided to breach the
confidentiality and restraint
provisions of the buy-back agreement.
The applicants created an impression that part of the buy-back
agreement amount was compensation
for the prejudice the restraint may
cause him. This, with respect, is not correct. There is no mention in
the restraint agreement
that the buy-back amount was allocated partly
for the purpose of the restraint agreement. The agreement clearly
indicates that
R6.26 million is the agreed market value of Kumeshin’s
15 per cent equity in Mainline. The R6.26 million is an amount due
to
him as a member of Mainline for the value of his shares and has
nothing to do with the restraint agreement.
[70]
Notably, the assertion by the applicants in paragraph 87 of the
replying affidavit is concerning.
The applicants assert that for the
limited period of the restraint, the 7.5 million compensation
Kumeshin received means that he
does not have to work. The applicants
suggest that the size of the payment mitigates any prejudice that the
restraint may cause
Kumeshin. As correctly pointed out by Mr Louser,
it is crucial to note that the R7.5 million is actually two separate
amounts,
and that the only compensation payable was R1.27 million in
terms of the termination of the employment agreement. R6.26 million
was for the purchase of shares in Mainline. Moreover, from this
amount, a loan claim of R919,428 due by Komeshin to Mainline, as
stipulated in the buy-back agreement, should also be deducted.
[71]
In his deposition, Kumeshin indicated that he does not come from a
wealthy background, nor does
he have exorbitant amounts of money,
which would enable him to sit at home and not earn a living. He
further stated that his parents
did not finish their high school
qualifications due to economic distress in their families. Throughout
his life, he had to study
hard and work tirelessly to provide not
only for himself but also for his parents, sister, nephew, his wife
and now his newborn
son. The applicants do not know the financial
commitments of Kumeshin. The suggestion that he need not work for the
duration of
the restraint is fallacious and unsustainable.
[72]
Kuymeshin is utilising his skills and training in a limited capacity
in KS Civil to practice
his profession. This has no connection to the
applicants’ protectable interest. In my view, Kumeshin should
not be prevented
from using his stock of general knowledge, skill,
and experience to earn a living.
[16]
Significantly, no person can be unreasonably prevented from earning a
living in the public domain. The right to trade and practice
a
profession is highly priced.
[17]
In my view, restraining the Kumeshin from practising his profession
under these limited circumstances would conflict with section
22 of
the Constitution, which guarantees his right to freedom of trade,
occupation, and profession.
[73]
Additionally, it is incontestable that Kumeshin, who was no longer an
employee at the time the
buy-back agreement was concluded, was in a
weaker bargaining position in relation to the applicants. While I
accept that attorneys
of repute represented him during the
negotiations leading to the conclusion of the buy-back agreement, he
did not have the same
bargaining power enjoyed by the applicants
during the negotiation of the buy-back agreement. Kumeshin was in the
minority, and
the other members were in the majority. In the replying
affidavit, Mr Spreckley, the consultant of Mainline, who also deposed
to
the founding and replying affidavits, denied that Kumeshin was
told that he had no right to question payments made by Mainline.
[74]
Mr Spreckley stated that it is a legitimate incident of company law
that a holder of 15 per cent
of shares can be outvoted on important
shareholder’s decision by the majority. That is the very
foundation of Company law.
Mr Spreckley is correct in his
observation; however, our Company law also recognises that a minority
shareholder must be paid the
fair value of his shares.
[18]
[75]
In
Roffey
v Catteral Edwards,& Goudre (Pty) Ltd
,
[19]
the court noted that ‘once it emerges that the covenantor was
the weaker party during negotiations, the Court will doubtless
be
aware of the possibility that his impotence was exploited, that he
was induced to say in the contract what he did not really
mean,
and that he was prevailed upon to accept publicly as fair that which
he rejected privately as oppressive. In my view, in
these
circumstances, it would be disproportionate to enforce the restraint.
Is
the restraint clause wider than is necessary to protect Mainline’s
protectable interest?
[76]
The restraint clause is so overbroad, couched in wide terms and is
legally incompetent. As it
is worded, the clause is clearly intended
to prohibit all competition by the Kumeshin in all fields of activity
of the applicants
throughout the entire Republic of South Africa. It
has not been disputed that the applicant operates in the Western
Cape, rather
than countrywide. An applicant should be astute to
motivate, in the founding papers, precisely why the area of the
restraint is
reasonable in the circumstances, and a failure to do so
could be harmful to the application. The applicant did not assert
that
Mainline operates and or has offices in the whole of South
Africa.
[77]
Furthermore, the applicants do not motivate for the operation of the
restraint in the whole of
South Africa in their founding papers or
otherwise. The applicants also do not deny that the majority of
Mainline’s contracts
are for the City of Cape Town.
Notwithstanding this, the applicants seek to enforce the restraint
against Kumeshin for the whole
of South Africa, despite Mainline only
operating in the Western Cape. In my view, this, on its own, renders
the restraint unreasonable
in that it exceeds what is necessary to
protect the applicants’ interests.
[20]
The overbroad description of the clause supports Kumeshin’s
assertion that the clause is contrary to the public policy and
therefore unenforceable.
[78]
The clause is also overly broad because of its scope, as it prohibits
Kumeshin directly or indirectly
from being in any association of any
nature with any competitor of Mainline. It is not necessary for the
protection of the applicants’
interests that the restraint be
cast in such wide-ranging terms. As correctly pointed out by
Kumeshin’s counsel, if the restraint
clause is interpreted to
encompass KS Civil’s service provider agreement with
Trenchless, which concerns the supply of general
plant equipment and
labour, and a narrow scope of work that does not create a reasonable
or probable risk of divulging Mainline’s
confidential
information, then it is unfair in its ambit.
[79]
In
MacPhail
(Pty) Ltd v Janse van Rensburg,
[21]
the court stated that as a matter of principle, a covenantee can
never have a legitimate interest in restraining a covenantor from
working in a totally innocent or neutral capacity for a competitor.
If a restraint purports to prescribe that, it is unreasonable.
Conversely restraint process should be interpreted restrictively so
as only to affect activities such as employment with a competitor
which infringes a legitimate proprietary interest. The supply of
equipment, labour and machinery does not infringe the protectable
interest of the applicants. Consequently, the restraint clause is so
wide-ranging that it is legally incompetent.
[80]
In conclusion, the applicants have not satisfied all the requirements
to obtain a final interdict
against Kumeshin, nor have they
established a case for a declaratory order against Kumeshin. On the
objective facts, there is no
evidence to suggest that Kumeshin
breached the restraint agreement. It is noted that Kumeshin is
associated with Trenchless in
a service that does not infringe the
protectable interest of the applicants. The applicant’s case is
clearly based on suspicion
and speculation that Kumeshin is divulging
its confidential information to Trechless. There is nothing of
substance to negate the
respondent's version.
[81]
On a conspectus of all the facts, it cannot be said that the
respondents' version is so far-fetched
or untenable that the court is
justified in rejecting it on the papers. To the extent that the
applicants seek a final interdict
and there is a dispute of facts on
the versions of the parties, a final interdict may only be granted if
the respondent's factual
version, together with the admitted facts in
the applicants' affidavits, justify such an order.
[22]
In my view, the respondents’ version must be accepted. As
foreshadowed above, it cannot be said that it is so far-fetched
or
untenable that it must be rejected on the papers. The version of the
respondents is plausible.
[82]
Finally, the affidavits submitted by the applicants do not provide
any evidence to support the
assertion that Trenchless is engaging in
unlawful competition with Mainline. Furthermore, no allegations are
presented regarding
the elements necessary for such a delictual
claim. It is important to note that Trenchless is not a party to the
buy-back agreement
and has not assumed any obligations under that
agreement toward either of the applicants. Trenchless also denied
employing Kumeshin,
as alleged by the applicants. In addition, at no
stage was Trechless or its management aware of Kumeshin’s
confidentiality
undertakings and restraint undertakings in favour of
Mainline when KS Civil was appointed as a service provider.
[83]
Consequently, the applicants have not demonstrated entitlement to any
relief against Kumeshin
and Trenchless whether in terms of unlawful
competition or otherwise. In operating KS Civil to hiring out
equipment, Kumeshin is
not breaching his restraint of trade
agreement. I am therefore satisfied that the only effect of the
restraint sought would be
to inhibit or prevent Kumeshin from using
his 'stock of general knowledge, skill and experience’ to earn
a living.
Costs
[84]
It is trite that the question of costs is a matter in the court’s
discretion. It is equally
trite that, as a rule, costs follow the
result, and successful parties should be awarded their costs.
[23]
This rule should be departed from only where good grounds for doing
so exist.
[24]
There is nothing in this case that warrants a departure from this
well-established principle.
Order
[85]
In the result, the following order is granted:
85.1
The applicants’ application is hereby dismissed. The applicants
are ordered to pay the respondents’
costs on a party and party
scale,
including
the costs of the
respondents’ counsels on scale C.
LEKHULENI JD
JUDGE
OF THE HIGH COURT
Appearances:
For
the Applicants: Adv Baguley
Instructed
by: Slabbert Venter Yanoutsos Inc
For
the First Respondent: Adv Loubser
Instructed
by: Allie and Naidoo Attorneys Inc
For
the Third Respondent: Adv Montzinger
Instructed
by: PMV Attorneys & Notaries
[1]
Inospace
Services (Pty) Ltd v Morris and Another
(2025/124057) [2025] ZAWCHC414 (September 2025) para 63.
[2]
Boomerang
Trade CC t/a Border Sheet Metals v Groenewald and Another
[2012]
JOL 29426
(ECG) para 36.
[3]
[1984] ZASCA 116
;
1984 (4) SA 874
(A) at 897F– 898E.
[4]
Saner J
Agreements
in Restraint of Trade in South African Law
issue
13 (October 2011) at 3-5 and 3-6.
[5]
Reddy v
Siemens Telecommunications (Pty) Ltd
2007 (2) SA 486
(SCA) para 14.
[6]
Reddy v
Siemens Telecommunications (Pty) Ltd
fn 5 above, para 14.
[7]
Reddy v
Siemens Telecommunications (Pty) Ltd
fn
5 above, para 15.
[8]
Du
Plessis v Road Accident Fund
2004
(1) SA 359
(SCA) paras 18 - 21.
[9]
Brisley
v Drotsky
2002
(4) SA (SCA) para 23.
[10]
Reddy v
Siemens Telecommunications (Pty) Ltd
fn
5 above, para 15.
[11]
Townsend
Productions (Pty) Ltd v Leech and Others
2001
(4) SA 33
(C) at 50J - 51B.
[12]
Amalgamated
Retail Ltd v Spark
1991
2 SA 143
(SEC) 150FH.
[13]
[1993] ZASCA 61
;
1993 (3) SA 742
(A) at 776H – 777B.
[14]
Reeves
and Another v Marfield Insurance Brokers CC and Another
[1996] ZASCA 39
;
1996
(3) SA 766
(A) at 776A - F;
Basson
v Chilwan
fn
13 above, at 786B - C.
[15]
Affordable
Medicines Trust and Other v Minister of Health and Others
2006
(3) SA247 (CC0 para 59
[16]
Bonnet
v Schofield
1989
(2) SA 156
AD at 160A.
[17]
Strike
Productions (Pty) Ltd
v
Bon
View Trading (Pty) Ltd and Others
[2011] JOL 26664
(GSJ) para 1.
[18]
See section 164(15)
(c)
(ii)
read with
section 164(16)
of the
Companies Act 71 of 2008
.
[19]
1977 (4) SA (N) at 499G.
[20]
Baroque
Medical (Pty) Ltd v Medtronic Africa (Pty) Ltd
2014
JDR 0758 para 42.
[21]
1996 (1) SA 594
(T) at 600D.
[22]
Plascon-Evans
Paints (Tvl) Ltd v Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984
(3) SA 623
(A) at 634H-I.
[23]
Union
Government v Gass
1959
(4) SA 401 (A) 413.
[24]
Gamlan
Investments (Pty) Ltd v Trilion Cape (Pty) Ltd
1996 3 SA 692
(C).
sino noindex
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