Case Law[2024] ZAWCHC 366South Africa
Steenkamp v Coolag (Pty) Ltd (Leave to Appeal) (17997/24) [2024] ZAWCHC 366 (12 November 2024)
High Court of South Africa (Western Cape Division)
12 November 2024
Judgment
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# South Africa: Western Cape High Court, Cape Town
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## Steenkamp v Coolag (Pty) Ltd (Leave to Appeal) (17997/24) [2024] ZAWCHC 366 (12 November 2024)
Steenkamp v Coolag (Pty) Ltd (Leave to Appeal) (17997/24) [2024] ZAWCHC 366 (12 November 2024)
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sino date 12 November 2024
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Certain
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#
FLYNOTES:
LABOUR – Restraint –
Execution
of order pending appeal
–
Judgment
granted enforcing restraint of trade clause – Appeal –
Restraint of trade clause was enforceable when
read in context –
Parties' evident intentions supported such interpretation –
Rectification was permissible under
binding case law –
Applicant’s continued attempts to solicit respondent’s
clients – Respondent demonstrated
exceptional circumstances
and potential for irreparable harm – Application dismissed –
Execution of order granted
–
Superior Courts Act 10 of 2013
,
s 18.
# IN THE
HIGH COURT OF SOUTH AFRICA
IN THE
HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE
DIVISION, CAPE TOWN)
Case
No.:
17997/24
In the matter between:
JACOBUS JOHANNES
PIENAAR STEENKAMP
(Identity Number:
7[…])
Applicant
and
COOLAG (PTY) LTD
(Registration Number:
2019/626722/07) Respondent
Date of hearing: 8
November 2024
## JUDGMENT DELIVERED ON 12
NOVEMBER 2024
JUDGMENT DELIVERED ON 12
NOVEMBER 2024
GORDON-TURNER, AJ:
Introduction
1.
This is an application for leave to appeal to the
full bench of this Court, alternatively to the Supreme Court of
Appeal (“
SCA
”
)
against the judgment handed down on 19 September 2024 (“
the
judgment
”
) enforcing a covenant
in restraint of trade between the respondent as former employee and
the applicant as its former employee.
2.
The respondent has applied on an urgent basis for
an order in terms of Section 18 of the Superior Courts Act 10 of 2013
(“
the SC Act
”
)
that the operation of the order in terms of the judgment not be
suspended by the applicant’s notice of his application for
leave to appeal, or any further application for leave to appeal to
the SCA or petition to the Judge President of that court, pending
the
outcome of any appeal which may follow, in the event of leave to
appeal being granted (“
the s18
application
”
).
3.
For the sake of consistency and to avoid
confusion, hereunder I refer to the parties as cited in the leave to
appeal application:
the applicant is Mr Steenkamp, and the respondent
is Coolag (Pty) Ltd.
4.
The leave to appeal application and the s18
application were opposed by the respondent and the applicant
respectively. The
founding affidavit in the s18 application set
out the basis for opposing the leave to appeal application. The
applicant delivered
an answering affidavit, hereafter referred to as
“
the opposing affidavit
”
to distinguish from the answering affidavit in the
application at first instance. No replying affidavit was filed
by the respondent.
Application for
condonation
5.
The leave to appeal application was filed out of
time by one court day. The applicant’s attorney had,
however, sent
the application by email on 10 October 2024
(the day before the
dies induciae
expired) to both the respondent and to the
registrar assigned to me while I had been serving as an acting judge.
The failure
to file in time was occasioned by both sets of
attorneys’ inability to locate the court file for several days
despite diligent
efforts to do so. Filing of the papers and the
arrangements for this hearing were complicated by all concerned not
appreciating
the provisions of practice note 45A(8) of the Western
Cape High Court practice directives effective from 2 October 2023
which provides
that “
In instances
where the relevant Judge or Acting Judge in no longer on the Bench or
serving on another Bench, whether permanently
or temporarily, the
application for leave to appeal and the court file is to be furnished
to the Chief Registrar who will process
the application to the
relevant Judge or Judge President as the case may be”
.
6.
The applicant delivered an application for
condonation of the late filing of the application. The
respondent did not oppose,
without conceding that the applicant
enjoys prospects of success on appeal, and subject to the
respondent’s right to address
the Court on this aspect in
arguing the leave to appeal application.
7.
A satisfactory explanation was provided for the
applicant’s default of the rules, and no prejudice was apparent
or alleged.
Despite my
prima facie
reservations about the applicant’s
prospects of success on appeal, and because he was entitled in any
event to oppose the
s18 application set down for hearing at the same
time, I considered that it would be unjust to non-suit the applicant
from arguing
his application for leave to appeal. Condonation for
later filing was granted on this basis.
The application for
leave to appeal
8.
The grounds for appeal against the judgment were
that it is erroneous in the following respects:
8.1.
Finding that the respondent had proved the
employment agreement between the applicant and the respondent (“
the
agreement
”
) contained a restraint
of trade, enforceable against the applicant in circumstances where
clause 17.2 of the agreement does not
constitute an enforceable
restraint of trade clause;
8.2.
Finding that clause 17.2 could be rectified in a
replying affidavit in motion proceedings under circumstances where
this was not
sought in the notice of motion or in the founding
papers.
8.3.
Granting
punitive costs against the applicant, as well as costs of counsel on
scale B, which is allegedly inconsistent with Rule
69A
[1]
(the applicant’s contention being that the application should
have been dismissed with costs on a party and party scale including
costs of counsel on scale B).
9.
A leave to appeal application must be brought in
terms of Section 17(1) of the SC Act, which provides that:
“
17
Leave to appeal
(1)
Leave to appeal may only be given where the
judge or judges concerned are of the opinion that-
(a)
…
(i)
the appeal would have a reasonable prospect of success; or
(ii)
there is some other compelling reason why the appeal should be heard,
including conflicting judgments
on the matter under consideration;
(b)
the decision sought on appeal does not fall within the ambit of
section 16 (2) (a); and
(c)
where the decision sought to be appealed does not dispose of all the
issues in the case, the appeal
would lead to a just and prompt
resolution of the real issues between the parties.
”
10.
Subsections 17(1)(b) and (c) do not apply in the
present matter. The leave to appeal application was presented
and argued
on the basis that there are good prospects of success and
that another court would reasonably have come to a different
conclusion
to that reached in the judgment on the identified grounds
of appeal, i.e. under s17(1)(a)(i).
The first ground of
appeal: no restraint of trade proved
11.
This
ground of appeal brings into focus the wording of the agreement, and
in particular the Restraint
[2]
clause 17.2.
12.
The applicant framed its argument somewhat
differently to the argument at first instance.
13.
The
applicant asserts in his opposing affidavit that the respondent’s
evidence as well as the letters addressed by its attorneys
clearly
prove that the respondent knew that the agreement which it required
him to sign “
was
incorrect
”
and
there was no meeting of the minds and no clear common intention or
mistake. In fact, the evidence proves the contrary
position.
All concerned, including the applicant, had plainly been under
the impression all along, up to the point when the
applicant was
advised on the contents of his answering affidavit, that clause 17.2
was a covenant in restraint of trade: the error
of which the
applicant belatedly seeks to take advantage – the missing word
“
not
”
- had
been completely overlooked by everyone.
[3]
14.
Counsel for the applicant submitted that the
respondent had to establish the existence of a restraint of trade,
and that to do so
one must look at the intention of the parties at
the time of concluding the employment agreement, of which there was
no evidence.
15.
However, this submission and the assertions in the
applicant’s opposing affidavit conflict with the applicant’s
evidence
in his answering affidavit to the application: there he had
taken the position that there
had
been a meeting of the minds in that the (written)
agreement included a provision (Clause 17.2) that, in summary,
enjoined him to
compete with the respondent after termination of his
employment by using its trade connections and confidential
information. He
so contended because the word “
not”
does not appear after the first three
words in clause 17.2, namely, “
The
EMPLOYEE will”.
He
submitted that this could not be ‘read into’ clause 17.2,
as this would amount to the Court impermissibly making
a new contract
for the parties. His case was that the agreement between the
parties was the very antithesis of a restraint
of trade, and that it
imposed a positive obligation upon him to act, rather than desist
from acting in the manner which the respondent
sought to prevent.
Somewhat contradictorily, he also contended that on 3 May 2024
in a discussion with directors of the respondent,
he had been
released from contractual restraints arising from his contract of
employment (the release was denied by the respondent
and belied by
subsequent correspondence).
16.
The
argument advanced in the leave to appeal application was predicated
on a comparison to inapposite case law where an oral agreement
in
restraint of trade was sought to be proved,
[4]
whereas this matter concerns a written agreement. The argument
avoided reference to the alleged positive obligation in clause 17.2
asserted by the applicant on affidavit (rejected in the judgment as
untenable), and to his mutually destructive (disputed) account
that
he had been released from the restraint.
17.
The respondent’s case is that the restraint
of trade is written into clause 17.2 of the duly executed written
employment agreement.
18.
In my view, there is no reasonable prospect that
another court, when paying attention to the necessary contextual
considerations,
would arrive at a different conclusion on the meaning
of clause 17.2 to that ascribed in the judgment.
19.
Clauses 16 and 17.1 provide context for the
meaning of clause 17.2: an effective workable agreement between
the employer and
employee required the applicant to safeguard the
proprietary interests and confidential information of the respondent
both during
his employment and thereafter. A restraint of trade
in place for a year served this purpose. It is sensible to read
in the word “
not
”
into a provision which in all other respects is
like the multitude of restraints of trade that have received the
attention of our
courts. This approach accords with the rule of
interpretation
ut regis magis valeat
quam pereat
which requires a
stipulation to be construed in a sense in which it can have some
operation rather than none.
20.
Conversely, the interpretation of clause 17.2
which the applicant had advanced – that it created a positive
obligation upon
him, after termination of his employment to deploy
the respondent’s proprietary interests and confidential
information so
as to divert business from the respondent to himself
or his own entity – apart from its inherent absurdity, requires
a strained
and artificial construction of clause 17.2.
21.
The
applicant’s opposing affidavit made repeated reference to the
fact that the respondent had drafted the agreement, and
called into
aid the
contra
proferentem
rule,
a rule used as a last resort
[5]
where all other methods of ascertaining the common intention of the
parties have failed. Counsel for the applicant was driven
to
concede that, as the applicant’s case is that clause 17.2 is
unambiguous,
[6]
that rule does
not apply in this matter. He resorted then to the submission
that another court may find that the respondent
ought to have taken
greater care in preparing the agreement.
[7]
The necessary implication of this submission is that another
court would interpret the agreement against the respondent and
in
favour of the respondent. For the reasons set out in the
judgment and above, I am not persuaded that there is a reasonable
prospect of such an interpretation being made. In any event the
‘failure to take care’ argument is, in effect
the ’
contra
proferentem
’
argument
in another guise.
[8]
The
binary nature of the respective interpretations advanced by the
applicant and the respondent respectively precludes the
ambiguity
necessary to trigger the use of the ’
contra
proferentem
’
rule.
The parties’ antithetical interpretations are merely
contradictory, but are not ambiguous.
22.
Neither the applicant (in his opposing affidavit)
nor his counsel (in argument) was able to advance any cogent reason
why another
court would reason differently to the judgment on the
meaning of clause 17.2 of the agreement.
23.
Leave to appeal on the first ground is refused.
The second ground of
appeal: Rectification of the agreement not permissible
24.
The applicant had insisted in his answering
affidavit that there was no mistake in the drafting of the agreement,
and that the respondent
would not be entitled to rectification of the
agreement, if sought. In its replying affidavit, the respondent
did seek rectification
of clause 17.2.
25.
Once
again, the applicant’s case in the leave to appeal application
diverged from his case at first instance. The argument
was
advanced that there was a mistake (in clause 17.2), that is was a
unilateral one by the drafter of the agreement (the respondent)
and
the applicant merely signed it, ‘snatching at the bargain’.
First, as set out above, this does not accord
with the evidence
in the applicant’s answering affidavit. Second, even if
this were to be accepted as true (which it
cannot in the face of the
applicant’s own evidence), there is authority that
rectification will be granted in cases of unilateral
conduct induced
by
dolus
in the
sense of unconscionable conduct.
[9]
This covers the party who, although not responsible for the fact that
the document does not correctly record the agreement, knows
that it
does not and stands silently by while the mistaken party signs in the
belief that it does.
[10]
26.
The
judgment in
Kidrogen
RF (Pty) Ltd v Nordien and others 2023 JDR 0260 (WCC)
,
[11]
which permitted rectification of a lease agreement even though it was
not applied for in the founding papers, was applied in the
judgment.
[12]
During
argument of the leave to appeal application the Court directed
counsel’s attention to the fact that the full
bench’s
decision in
Kidrogen
has
been the subject of an application for leave to appeal to the SCA,
where it was argued simultaneously with the appeal, and the
SCA’s
judgment is presently awaited. On behalf of the applicant, Mr
Le Roux agreed that until the SCA overturned
Kidrogen
,
this Court is bound to follow it, unless (so I understood him to
submit) I was persuaded that another Court would find differently
to
the full bench in
Kidrogen
,
or that another Court would find that this matter is distinguishable
in the respects relied upon in my judgment.
27.
It would be impertinent for me, presiding as a
single judge, to express a view on the prospects of another court
finding differently
to the three judges of the WCHC full bench (who
were in agreement). That is a matter presently for decision by
the SCA, and
I cannot second guess the SCA’s pending decision.
I am bound to determine this application for leave to appeal on
the
basis that
Kidrogen
is
binding authority.
28.
As for points of distinction between this matter
and
Kidrogen
,
Mr Le Roux was able to direct me to only one:
Kidrogen
concerned an agreement of lease, which required
rectification in relation to the identity of the landlord, while the
present matter
concerns an agreement of employment in which
rectification is sought to the restraint of trade clause. I
regard there to
be no difference in principle such as to preclude
rectification being sought in reply, and granted. In
Kidrogen
,
Cloete J articulated it thus: “
Put
differently, until delivery of the answering affidavit the first
respondent neither seriously nor unambiguously took issue with
the
written recordal of the lease by contending that it did not in fact
reflect the parties' true intention
”
.
Equally in this matter, until receiving advice from his
attorney and counsel on how to settle his answering affidavit, the
applicant made no mention of the omission of the word “
not
”
from clause 17.2 of the employment agreement.
Indeed, the respondent’s attorneys had addressed a letter to
the applicant on
27 May 2024 advising that preparation had commenced
for an urgent application “
to
enforce the restraint of trade ...”,
yet
the answer by the applicant’s attorneys on 28 May 2024
not only provided undertakings to the respondent but
notably did not
refute that the applicant was under a restraint of trade as referred
to by the respondent’s attorneys.
29.
Taking this evidence into account, I am not
persuaded that there are reasonable prospects of another court
holding that
Kidrogen
is
distinguishable from the facts and principles in this case, or that
rectification was precluded by a dispute of fact regarding
the
parties’ common intention to include a restraint of trade
provision in their agreement, or that the respondent failed
to prove
the common intention of the parties (this was proven by the
applicant’s own evidence as well as that of the respondent),
or
that the applicant failed to make out a case for rectification.
30.
Leave to appeal on the second ground is refused.
The third ground of
appeal: scale of costs order
31.
The
applicant’s third ground of appeal concerns the punitive costs
order and whether the judgment correctly incorporated into
an
attorney and client costs order the scales A, B and C provided for in
Uniform Rule 69(7), bearing in mind that the scales appear
to apply
only to party and party costs awards.
[13]
Counsel for the applicant, Mr Le Roux, conceded that a matter
of costs alone cannot ordinarily be the subject of an appeal.
He
submitted that if leave to appeal was granted on other grounds, the
appeal would afford an opportunity for clarity on
whether the scales
apply only to party and party costs orders.
32.
I have already found that the applicant does not
enjoy reasonable prospects of success on his main grounds of appeal
(the restraint
of trade and the rectification). Attaining
certainty on the applicability of scales A, B or C in the costs order
is
not a compelling reason to grant leave to appeal.
33.
There is a reasonable prospect that another court
will hold that the scales for counsel’s fees (A, B and C)
provided in Uniform
Rule 69(7) do not apply to an attorney and client
costs order, even where, as in the present case, the applicant
proposed scale
B to be appropriate for an award of party and party
costs in his favour. However, counsel conceded that the effect
of applying
scale B in the costs order caps the fees of the
respondent’s counseI, to the benefit of the applicant. To
my mind,
even if an appeal court were to disturb that aspect of the
costs order, no advantage would inure to the applicant.
34.
Regarding
the costs order being granted on a scale as between attorney and
client, as recently articulated by Movskovitz AJ,
[14]
a high threshold must be met before a costs order alone will be
permitted to form the subject of an appeal. An appeal against
it may entail adjudication of the merits through the back-door, which
would potentially be an enormous waste of judicial resources.
The
costs order entails no issue of great legal principle. In any event
the costs order is an exercise of a wide discretion,
to be exercised
judicially, with which appeal courts will seldom
interfere.
[15]
The
Constitutional Court, in considering the discretion of the High Court
on the issue of costs,
[16]
has
stated that:
“
A
cautious approach is, therefore, required. A court of appeal may have
a different view on whether the costs award was just and
equitable.
However, it should be careful not to substitute its own view
for that of the High Court because it may, in certain
circumstances
be inappropriate to interfere with the High Court's exercise of
discretion
.”
35.
Other than to submit that the application ought to
have been dismissed with party and party costs (scale B) in its
favour, the applicant
has not laid any basis for any
interference in this case. I am not persuaded that there are
reasonable prospects that another
court would interfere in the award
of costs on the scale as between attorney and client to the
successful respondent. Leave
to appeal on the third ground is
refused.
The section 18
application
36.
To
render the suspended judgment operative, s18(1) of the SC Act
[17]
requires exceptional circumstances to be established. The SCA
recently held that consideration of the three requirements
in section
18(3) is not a hermetically sealed enquiry and could hardly be
approached in a compartmentalised fashion, explaining
[18]
that:
“
...
the
existence of 'exceptional circumstances' is a necessary prerequisite
for the exercise of the court's discretion under s 18.
If the
circumstances are not truly exceptional, that is the end of the
matter. The application must fail and falls to be dismissed.
If,
however, exceptional circumstances are found to be present, it would
not follow, without more, that the application must succeed
.
”
...
...
the presence or
absence of irreparable harm, as the case may be, can hardly be
entirely divorced from the exceptional circumstances
enquiry.
...
The
overarching enquiry is whether or not exceptional circumstances
subsist. To that end, the presence or absence of irreparable
harm, as
the case may be, may well be subsumed under the overarching
exceptional circumstances enquiry. As long as a court is alive
to the
duty cast upon it by the legislature to enquire into, and satisfy
itself in respect of, exceptional circumstances, as also
irreparable
harm, it does not have to do so in a formulaic or hierarchical
fashion.
”
37.
The respondent motivated the need for urgent
relief with reference to the applicant’s apparent determination
to continue diverting
the respondent’s customers to his own
business. This appeared from correspondence attached to the founding
affidavit. Two
court days after delivery of the judgment, the
applicant’s attorneys addressed a letter to the respondent’s
attorneys
advising that a consultation had been arranged on
25 September 2024 with the applicant and counsel to
consider the prospects
of successfully launching an application for
leave to appeal. The respondent was requested to indulge the
applicant by not
enforcing the judgment during the fifteen day period
permitted to file the application. On 23 September 2024, prior
to that
scheduled consultation, the applicant addressed an email
marked with high importance to one of the respondent’s clients,
Coastal Air Conditioning (“
Coastal
”
)
who had been listed in the judgment as a client whose custom the
applicant was restrained from soliciting or obtaining up to 2
May
2025. The applicant reported that within the next few days he
and his legal representatives would be preparing an application
for
leave to appeal the judgment, and quoted his attorneys’
aforesaid letter requesting that the judgment not be enforced
in the
fifteen day period. He concluded by saying “
Inteendeel
het my advocaat en prokureur my aanbeveel om voort te gaan met my
werk totdat die appel en saak heeltemaal afgehandel
is. Weerens
jammer vir die ongerief dat jy en my ander kliente daar onder moet
lei”
.
38.
Coastal forwarded the email to the respondent on 2
October 2024.
39.
The applicant did not use the opportunity in his
opposing affidavit to explain the reason for his email to Coastal and
the meaning
of his quoted words. It is unclear whether he was
asserting an entitlement to continue trading with Coastal, or
apologising
for having to stop doing so. Either way, it is
clear that he had by then, at the very least, attempted to solicit
Coastal’s
business, in breach of the order. His
expression of regret for inconvenience to his other clients makes
sense only if they
were also clients listed in the order as the
respondent’s clients whose custom the applicant was restrained
from soliciting
or obtaining – no apology or regret is required
in regard to customers
not
listed in the order, whose custom the applicant is
free to secure. His email accordingly provides compelling
evidence, without
any countervailing evidence from the applicant,
that he has been actively soliciting and possibly also obtaining
custom from the
respondent’s clients.
40.
The
respondent filed its s18 application on 15 October 2024, the day
after the leave to appeal application was delivered. Although
the respondent could have filed the application beforehand because by
2 October 2024 it had become aware of the applicant’s
intention
to proceed with a leave to appeal application,
[19]
the respondent cannot be criticised for failing to act expeditiously.
In any event, there was no challenge to the contentions
regarding the urgency of the s18 application, and it was accordingly
entertained as such.
41.
Of significance to the enquiry into the respective
potential of irreparable harm to each of the parties respectively is
that the
applicant does not challenge the finding in the judgment
that the respondent has proprietary interests susceptible of
protection,
comprised of trade connections and confidential
information.
42.
Similarly, the applicant does not dispute that he
had encroached upon the client relations of the respondent to promote
the commercial
interests of his own entity by utilising the
respondent’s trade connections, and he had wilfully diverted
the resources of
the respondent for his own benefit and for the
benefit of his entity. He had done so even while employed by
the respondent
(which he concedes was a breach of clause 17.1 of the
employment agreement). I have considered above the more recent
undisputed
evidence of his endeavours to obtain the custom of Coastal
and other clients of the respondent. The applicant endeavoured
to justify his attempts to appropriate the respondent’s clients
by asserting no less than four times in his opposing affidavit
that
he attracts their custom because they are dissatisfied with the work
rendered by the respondent. This hearsay, as well
as being
devoid of any details as to which clients he referred, was not
confirmed by any allegedly dissatisfied clients. It
was also
not proven in the main application – there also the applicant’s
contentions were hollow and unsubstantiated.
43.
The respondent contended that the nature of
restraint proceedings, directed at the immediate protection of a
protectable interest,
in itself contemplates the ‘exceptional
circumstances’ applicable to a s18 application.
44.
Referring to the delays inherent in the
prosecution of an appeal process, which may render any ultimate
decision of only academic
or limited value, the respondent further
contended that it stands to suffer irreparable harm if the judgment
is not put into effect
pending any possible appeal or further
applications or petitions for leave to appeal and ensuing appeals.
The restraint period
ends within less than six months on 2 May
2025, so with each passing day that the applicant is able to continue
to solicit (and
obtain custom from) the respondent’s clients,
the efficacy of any relief which the respondent may obtain if and
when the
applicant’s appeal(s) fail, is diluted. Indeed,
even if dealt with on an expedited basis the duration of the appeal
process may render useless any relief that the respondent receives if
successful in opposing the appeal(s). As things stand,
the
respondent has been denied the full benefit of the restraint of
trade, and of the order granted on 19 September 2024, for a
period of
over six months.
45.
The
respondent’s submissions have merit, and are supported by the
reasoning of the Labour Court in
L’Oreal
South Africa (Pty) Ltd v Kilpatrick and Another
[20]
in finding that the suspension of an order enforcing a restraint of
trade covenant would entail the steady erosion of the former
employer’s protectable interests, which is irreparable harm
[21]
to the employer.
46.
The respondent has discharged the
onus
upon it to show that it will suffer irreparable
harm should the order not be put into operation.
47.
Regarding the third enquiry, i.e., the potential
of irreparable harm to the party opposing a s18 application, the SCA
has held that
“
...
although
s 18(3) casts the onus (which does not shift) upon an applicant,
a respondent may well attract something in the nature
of an
evidentiary burden. This would be especially so where the facts
relevant to the third are peculiarly within the knowledge
of the
respondent. In that event it will perhaps fall to the
respondent to raise those facts in an answering affidavit to
the s 18
application, which may invite a response from the applicant by way of
a replying affidavit
.”
48.
The applicant, who is now self-employed, did not
take issue either in his opposing affidavit or in argument with the
findings in
the judgment:
48.1.
that the restraint of trade does not preclude him
from using his skills, knowledge and experience in a similar industry
to that
in which the respondent conducts its business, or even from
attaining employment as a project manager in a different industry,
and
48.2.
that limited as proposed by the respondent, the
restraint of trade is reasonable.
49.
In addressing the issue of irreparable harm, the
applicant once again resorted to generalised and generic statements
devoid of any
substantiating facts. He asserted that if the
order was not suspended (and the restraint of trade therefore
operative) he
would be unable to ‘put bread on [his] table’.
This statement is meaningless without any particulars of his earnings
and the sources thereof, none of which were provided.
50.
In neither of his affidavits does the applicant
provide any details of his current customers, his attempts to procure
business from
customers other than those of the respondent, and
whether he has attempted to apply his project management experience
in fields
other than that in which the applicant operates.
51.
Even if it is accepted that the applicant will
suffer a measure of financial hardship if the order was rendered
operative for the
remaining months of the restraint period, on the
limited evidence, this does not amount to irreparable harm. The
applicant
did not discharge its evidentiary burden.
52.
The
applicant contends that it is impermissible for the respondent to
seek an order that the judgment is not suspended even if the
leave to
appeal application is refused thereby “
depriving
[him]
of
the right to suspension of the order, pending the finalisation of the
whole process”
.
No authority was advanced for this proposition. Equally,
the respondent did not cite any authority in support of the
relief to
render the order operative for the period beyond the present
application for leave to appeal. However, such extended
execution
orders have been granted.
[22]
Bearing in mind the high threshold to attain section 18 relief,
such extended execution orders are a pragmatic solution to
the
potential problem of multiple s18 applications burdening the court
rolls as the aggrieved party wishing to appeal the order
and to
retain its suspension, initiates and prosecutes the next phase of
appeal or applying for leave to appeal, as the case may
be. Provided
that the aggrieved party has evinced its intention to take further
steps in the appeal process, an order that
provides for operation of
the order for a more extended period facilitates the efficient
administration of justice and avoids the
potential injustices
meticulously explained by Kathree-Setloane J in the
Fidelity
Services
judgment.
[23]
The aggrieved party enjoys an automatic right of urgent appeal
should a s18 application be granted
[24]
which provides the opportunity to obtain protection against any
resulting injustice from an extended execution order, which has
the
effect of automatically suspending the execution order pending the
outcome of the appeal, and which cannot be thwarted by the
range of
an execution order extending to an appeal against the execution order
itself.
[25]
It is
therefore unsurprising and appropriate that our courts have not
flinched from granting execution orders that extend
beyond the
current step in the appeal process.
53.
I am satisfied that the respondent has met the
requirements for the relief sought in the s18 application.
Costs
54.
Mr Aggenbach submitted that for similar reasons to
those set out in the judgment, an award of attorney and client costs
should be
made against the applicant if leave to appeal were refused.
He submitted that such an order was justified because the leave
to appeal application is a calculated stratagem to wear away the
duration of the restraint while the appeal processes were being
followed, which he described as an abuse of process.
55.
The applicant gave notice to the respondent a week
after the judgment was granted that it would possibly apply for leave
to appeal
after conferring with his legal representatives, but he
only lodged the appeal almost two weeks later. It may well be
fair
comment that the applicant is deliberately ‘running down
the clock’ on the period of the restraint which ends on
2 May 2025
so that he can enjoy the benefit of the judgment
being suspended. However, it does not necessarily follow that
the appeal
is an abuse of process. The applicant has acted on
the advice of his legal representatives and has focussed his
application
for leave on limited grounds of appeal. He
exercised a procedural right to which he is entitled. Punitive
costs are
not justified. Similar considerations apply to his
opposition to the s18 application.
56.
The following order is granted:
56.1.
The application for leave to appeal is dismissed
with party and party costs to be paid by Jacobus Johannes Pienaar
Steenkamp, including
the costs of counsel on scale B of Uniform Rule
69(7).
56.2.
The operation and execution of the orders in the
judgment granted under case number 17997/2024 on 19 September 2024
are to be implemented
with immediate effect pending any further
application for leave to appeal to the Supreme Court of Appeal
(“
SCA
”
)
or to the President of the SCA and pending any appeal process by
Jacobus Johannes Pienaar Steenkamp, or until another court otherwise
directs.
56.3.
The applicant, Jacobus Johannes Pienaar Steenkamp,
shall pay the respondent’s party and party costs in the section
18 application,
including the costs of counsel on scale B of Uniform
Rule 69(7).
GORDON-TURNER AJ
Appearances:
Counsel
for the Applicant:
Adv J H F Le Roux
Instructed
by:
Mr Pieter Strydom
P J S
Inc. Attorneys
Counsel
for the First Respondent:
Adv Mornè Aggenbach
Instructed
by:
Mr James Galloway
C &
A Friedlander Attorneys
[1]
The
reference to non-existent Rule 69A was understood to be a
typographical error and that the applicant intended to refer to
Rule
67A, read with Rule 69, particularly its sub-rule (7).
[2]
The
salient portions of the agreement are clauses 16 and 17 which
provide:
“
16.
CONFIDENTIALITY
16.1
All information of a confidential nature acquired by the EMPLOYEE
during the course of his
employment with the EMPLOYER shall not be
disclosed to any person during his employment with the EMPLOYER or
after termination
of such employment.
16.2
For purposes of this agreement ‘confidential information’
shall be deemed to include
but shall not be limited to:
16.2.1
the EMPLOYER’S trade secrets, products, new developments,
business methods and techniques;
16.2.2
the identity of the EMPLOYER’S clients and/or customers.
17.
RESTRAINTS
17.1
The EMPLOYEE acknowledges that he is employed for the benefit of the
EMPLOYER and further undertakes
during his employment to preserve
the interests of the EMPLOYER at all times and not to involve
himself directly or indirectly
in any other position offering the
same services.
17.2
The EMPLOYEE will for a period of 1 (one) year from the date of
termination of Employment,
either on his own behalf or on behalf of
any person, firm or company competing or endeavouring to compete
with the EMPLOYER,
directly or indirectly solicit or endeavour to
solicit or obtain the custom of any person, firm or company
presently a client
or supporter (whether financial or otherwise) of
the EMPLOYER or which at any time during the 1 (one) year preceding
the date
of such termination has been a client of the EMPLOYER, or
use his personal knowledge of or influence over any such client or
person, firm or company known to him as contracting with or having
dealings with the EMPLOYER, to or for his own benefit or that
of any
other person, firm or company in competition with the EMPLOYER.
”
[3]
The
phenomenon of failing to notice a missing word is not unusual and is
the subject of academic study. See for example
Kuan-Jung
Huang and Adrian Staub
Why
do readers fail to notice word transpositions, omissions, and
repetitions? A review of recent evidence and theory
Lang
Linguist Compass. 2021;e12434.
https://doi.org/10.1111/lnc3.12434.
The learned authors
conclude
that certain kinds of errors frequently go unnoticed at a conscious
level, and also appear to leave no trace in the eye
movement record
when they are not noticed.
[4]
Crazy
Splash Swim School (Pty) Ltd v Nortje and others
Case
No 20743/2022 13 July 2023
[5]
Cairns
(Pty) Ltd v Playdon & Co, Ltd
1948
(3) SA 99
(A) at 123
[6]
cf
Cairns
,
supra, at 122 to 123
[7]
In
the notice of application for leave to appeal, this argument is
found under the rectification ground at paragraphs 2.7.1 to
2.7.6.
[8]
Ibid
[9]
GB
Bradfield
Christie’s
Law of Contract in South Africa
,
7 ed at 375, and the authorities cited at footnote 74.
[10]
Ibid
[11]
2023
JDR 0260 (WCC)
[12]
At
paragraphs 60 to 62
[13]
Mashavha
v Enaex Africa (Pty) Ltd
(2022/18404)
[2024] ZAGPJHC 387 (22 April 2024) at paragraphs [5] and [7]
[14]
YG
Property Investments (Pty) Ltd v Ekurhuleni Metropolitan
Municipality and another (Leave to Appeal)
2024
JDR 3425 (GJ)
[15]
In
Kruger
Bros & Wasserman v Ruskin
1918
AD 63
at [69]:
“
The
rule of our law is that all costs – unless expressly otherwise
enacted – are in the discretion of the Judge. His
discretion
must be judicially exercised, but it cannot be challenged, taken
alone and apart from the main order, without his
permission
.”
[16]
Hotz
and Others v University of Cape Town
2018
(1) SA 369
(CC) at para 2
[17]
Those sections provide:
“
18
Suspension of decision pending appeal
(1)
Subject to subsections (2) and (3), and unless the court under
exceptional circumstances
orders otherwise, the operation and
execution of a decision which is the subject of an application for
leave to appeal or of
an appeal, is suspended pending the decision
of the application or appeal.
(2)
Subject to subsection (3), unless the court under exceptional
circumstances orders
otherwise, the operation and execution of a
decision that is an interlocutory order not having the effect of a
final judgment,
which is the subject of an application for leave to
appeal or of an appeal, is not suspended pending the decision of the
application
or appeal.
(3)
A court may only order
otherwise as contemplated in subsection (1) or (2), if the party
who
applied to the court to order otherwise, in addition
proves on a balance of probabilities that he or she will suffer
irreparable harm if the court does not so order and that
the other party will not suffer irreparable harm if the court so
orders.
”
Sub-section
18(2) of the SC Act does not apply in this matter as the order
sought to be appealed has final effect.
[18]
Tyte
Security Services CC v Western Cape Provincial Government and Others
2024
(6) SA 175
(SCA) at paragraphs [10], [11], [13] and [14]
[19]
Fidelity
Security Services (Pty) Ltd v Mogale City Local Municipality and
Others
2017
(4) SA 207
(GJ) at paragraphs [20] and [25]
[20]
2015
(6) SA 256 (LC)
[21]
Ibid
at
para [56]
[22]
See
Tyte
Security Services CC v Western Cape Provincial Government and
Others,
supra
at para [7] (the SCA upholding the execution order at para [29]);
Fidelity
Security Services (Pty) Ltd v Mogale City Local Municipality and
Others,
supra at para [35]
[23]
Ibid
at
paragraphs [17] to [20]
[24]
This
right is provided in section 18(4) of the SC Act, which provides:
“
(4)(a)
If a court orders otherwise, as contemplated in subsection (1)-
(i)
The court must immediately record its reasons for doing so;
(ii)
the aggrieved party has an automatic right of appeal to the next
highest court;
(iii)
the court hearing such an appeal must deal with it as a matter of
extreme urgency; and
(iv)
such order will be automatically suspended, pending the outcome
of such appeal.
(b)
‘
Next highest court’
, for purposes of paragraph
(a) (ii), means-
(i)
a full court of that Division, if the appeal is against a decision
of a single
judge of the Division; or
(ii)
the Supreme Court of Appeal, if the appeal is against a decision of
two judges
or the full court of the Division
.”
[25]
Knoop
NO and Another v Gupta (Execution)
2021
(3) SA 135
(SCA) at para [29]
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