Case Law[2023] ZAGPJHC 410South Africa
Michelin Tyre Company South Africa (Pty) Ltd v Morgan and Another (26379/2023) [2023] ZAGPJHC 410 (2 May 2023)
Judgment
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# South Africa: South Gauteng High Court, Johannesburg
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## Michelin Tyre Company South Africa (Pty) Ltd v Morgan and Another (26379/2023) [2023] ZAGPJHC 410 (2 May 2023)
Michelin Tyre Company South Africa (Pty) Ltd v Morgan and Another (26379/2023) [2023] ZAGPJHC 410 (2 May 2023)
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sino date 2 May 2023
FLYNOTES:
LABOUR – Restraint – Breach – Former employee
taking up position with competitor – Departing
from
competitor after application launched – Employer seeking to
restrain respondent in respect of any other competitor
– Not
established that respondent currently in breach of the restraint
provisions – Application dismissed.
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE NO: 26379/2023
NOT
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
REVISED
02.05.23
In
the matter between:
MICHELIN
TYRE COMPANY SOUTH AFRICA (PTY) LIMITED
Applicant
and
MORGAN,
CALVIN
First
Respondent
CONTINENTAL
TYRE SA (PTY) LTD
Second Respondent
Neutral citation
:
MICHELIN TYRE COMPANY SOUTH AFRICA (PTY) LIMITED v MORGAN, CALVIN
& OTHER
(Case No. 00313/2023) [2023] ZAGPJHC 410 (02 May
2023)
JUDGMENT:
NEL
AJ
INTRODUCTION
[1]
This is a semi-urgent opposed application in terms of
which the
Applicant essentially seeks an order restraining the First Respondent
from taking up employment with any competitors
of the Applicant, for
the balance of the restraint period applicable to the First
Respondent.
[2]
In the Notice of Motion the Applicant (“Michelin”)
seeks
an order, firstly, interdicting and restraining the First Respondent
(‘Mr Morgan”) from being employed by, being
associated
with or being interested in any manner and in any capacity whatsoever
with the Second Respondent (“Continental”)
or any other
person or any entity with which Michelin directly or indirectly
competes, in the various segments of the tyre industry
including
(without limitation) automotive, truck and bus, agriculture, heavy
industry, aviation, mining tyres, within the whole
of the Republic of
South Africa, until 10 June 2023; and secondly, interdicting and
restraining Mr Morgan from directly or indirectly
or in any like
capacity as he did whilst employed at Michelin, whether on his own
behalf or on behalf of another entity, soliciting
custom from,
dealing with, supplying or engaging in any manner whatsoever with any
person or entity with whom Michelin dealt whilst
Mr Morgan was
employed by Michelin, within the whole of the Republic of South
Africa, until 10 June 2023.
[3]
The Urgent Application was instituted on 10 March 2023,
and set down
for hearing on 11 April 2023. As at 10 March 2023, Mr Morgan
was employed by Continental, a direct competitor
of Michelin.
There is no dispute that Michelin and Continental are direct
competitors.
[4]
On 27 March 2023, and after the Urgent Application had
been launched,
Michelin ascertained that Mr Morgan and Continental had concluded a
Mutual Separation Agreement, in terms of which
Mr Morgan’s
employment with Continental had been terminated.
[5]
As a result of such termination, Michelin sought to amend
the relief
sought in the Notice of Motion by deleting any reference to
Continental, and accordingly not seeking any relief as against
Continental.
[6]
On 27 March 2023, Mr Morgan advised Michelin’s
attorneys, by
way of a letter, of the termination of the Employment Contract with
Continental, and advised Michelin’s attorneys
that in his
opinion the Urgent Application was no longer relevant, was not
urgent, and that there was no need for Michelin to pursue
the
Application any further.
[7]
Whilst there was a dispute as to the contents of the
letter, and
allegations that there were two versions of the letter, nothing turns
on such disputes.
[8]
Michelin’s attorneys responded on 31 March 2023,
recording,
inter alia
, that Mr Morgan’s contention that the hearing
of the Urgent Application is no longer relevant, is incorrect, and
that Michelin
intended proceeding with the Urgent Application as the
termination of Mr Morgan’s employment with Continental only
addressed
the relief sought as far as Continental was concerned, but
that such termination did not address the relief sought by Michelin
in respect of “
any other person or entity with which the
Applicant directly or indirectly competes, in the various segments of
the tyre industry
including …
”, nor did it address
the relief as sought in paragraph 2.2 of the Notice of Motion or the
costs claimed in the Notice of
Motion. Mr Morgan then opposed the
Urgent Application.
[9]
The statement in the letter of 31 March 2023, from Michelin’s
attorneys to Mr Morgan, to the effect that the termination of Mr
Morgan’s employment with Continental only resolves the relief
sought by Michelin insofar as it relates to Continental, relates to
the remaining relief sought by Michelin, in respect of “any
other competitor”.
THE
PRIOR URGENT APPLICATION
[10]
This Urgent Application was preceded by an urgent application
launched
in the Eastern Cape Division under case number 353/2023,
between the same parties, in which Michelin sought essentially the
same
relief sought in the Notice of Motion utilised in this Urgent
Application. The Court that heard the urgent application in
the
Eastern Cape Division ultimately found that such Court did not have
the jurisdiction to determine the relief sought, and accordingly
dismissed the application with costs.
[11]
In such regard, Michelin’s attorneys contended that the Eastern
Cape Court did not pronounce on the merits of Michelin’s
application, and that the merits of Michelin’s claim have
not
yet been determined. Whilst I accept that it is correct that the
merits in the urgent application launched in the Eastern Cape
Division have not yet been determined, it is not for me to reconsider
the merits of that urgent application, but only the Urgent
Application before me, having regard to any changed factual
circumstances.
RELEVANT
FACTUAL BACKGROUND
[12]
On 5June 2019 Michelin and Mr Morgan concluded a written Agreement of
Employment. Mr Morgan was initially employed by Michelin as a
Sales Agent, and thereafter as an Accounts Manager until 10
December
2022, when he resigned his employment with Michelin.
[13]
The Agreement of Employment contains what is commonly referred to as
a Restraint of Trade clause, being clause 23 of the Agreement.
It appears from the relief sought that the particular portion
of
clause 23 that Michelin relies on is clause 23.4, which reads as
follows:
“
23.4
The Employee undertakes that, in order to preserve and protect the
Company’s proprietary information, the
Employee shall not-
(a)
become employed by, be associated with nor be interested in any
manner and in any capacity whatsoever
with the Company’s
competitive entities, whether directly or indirectly in competition
with the Company, during the term
of the Employee’s employment
or during the restraint period and within the restraint area; nor
(b)
Solicit, interfere with nor entice any of the Company’s
members of staff, customers, clients, and business partnerships,
during
its term of employment and during the restraint period within
the restraint area.”
[14]
I have accepted for the purposes of determining this Urgent
Application
that clause 23 must be considered in its entirety in
order to determine whether the relief as sought by Michelin should be
granted,
as the relief sought in the Notice of Motion is wider than
what is stipulated in clause 23.4.
[15]
The restraint period referred to in clause 23 is a period of 6 months
from the date of termination of the employee’s employment with
Michelin, and the restraint area is defined as being the whole
of the
Republic of South Africa.
[16]
The term “
competitive entities
” is also defined in
clause 23, as being:
“
entities
with which the Company directly or indirectly competes within the
various segments of the tyre industry, which includes,
but is not
limited to, automobile, truck and bus, agriculture, heavy industry,
aviation, mining tyres and with the entities of
Tyre Plus and
MTSC/MTSN or any other Michelin supported and/or owned entity within
the restraint area”
Mr
Morgan resigned from his employment with Michelin by tendering one
month’s notice on 10 November 2022, and accordingly
his notice
period and employment terminated on 10 December 2022.
[17]
In the circumstances, the 6-month restraint period as referred to in
clause 23 of the Agreement of Employment would expire on 10 June
2023.
[18]
Michelin alleges that it attempted to assist Mr Morgan as Mr Morgan
was
going through “
a difficult time in his personal life
”
at the time, and secured employment for Mr Morgan at Minty’s, a
major tyre retailer dealership which Michelin regarded
as not being
in competition with Michelin. The potential employment with
Minty’s is not disputed by Mr Morgan, but
he contends that
Minty’s indirectly competes with Michelin. Mr Morgan
seeks to suggest in such regard that Michelin
is breaching its own
restraint of trade, and is waiving the restraint of trade, by
arranging such potential employment with Minty’s.
[19]
Mr Morgan commenced employment with Continental on 16 January 2023,
although
the intended date of commencement was 1 February 2023. Mr
Morgan concluded his employment contract with Continental on 23
December 2023.
[20]
Mr Morgan posted his new status as Area Sales Manager of Continental
on his LinkedIn profile, which is accessible to any member of the
public.
[21]
On 26 January 2023, Michelin became aware of Mr Morgan’s
employment
with Continental, through the contents of Mr Morgan’s
profile on LinkedIn.
THE
APPLICANT’S CONTENTIONS
[22]
As already set out above, at the time of the preparation of the
Founding
Affidavit and the launching of the Application, Mr Morgan
was still employed with Continental.
[23]
Michelin contended that the employment of Mr Morgan at Continental
constitutes
a continuing direct breach of clause 23 of the Agreement
of Employment, on the basis that Continental is a direct competitor
of
Michelin, and Mr Morgan’s employment with Continental was
within the six-month restraint period. Mr Morgan neither
admitted nor denied that Continental was a direct competitor of
Michelin but it is clear from the factual allegations that Michelin
and Continental are in direct competition.
[24]
Michelin alleged that if Mr Morgan had not been employed by a
competitor
of Michelin in the Republic of South Africa during the
six-month restraint period, then he would not have breached the
restraint.
[25]
Michelin alleged that Mr Morgan has substantial knowledge of the
business
of Michelin, is possessed of Michelin’s proprietary
and confidential information, has personal knowledge of the pricing
and
discount structures of Michelin, the purchasing trends of
specific customers, has gained access to Michelin’s trade
secrets
including internal control systems, financial details and
details of Michelin’s policies relating to recruitment and
employment,
and a thorough and detailed knowledge of the workings of
Michelin, its sales structures, its approach to the sale of tyres,
its
policies and strategies.
[26]
Michelin also sets out in detail the role of Mr Morgan as Accounts
Manager,
and the nature of the information that Mr Morgan was privy
to.
[27]
Michelin alleges that, as a result of the knowledge of the
confidential
information and the proprietary information of Michelin,
Mr Morgan “
could if he so wished
” disclose the
information,” if
he so decides
”, to Continental
(or any other direct or indirect competitor). Michelin contends
that such ability on the part of Mr
Morgan constitutes “
good
and sufficient grounds
” for the relief sought by Michelin.
[28]
Michelin contends that Mr Morgan’s employment with Continental
(or any other competitor) is “
likely to lead to damages and
prejudice to the Applicant
”.
[29]
Mr Morgan denied the allegations relating to potential harm and
prejudice,
and alleged that he is not in possession of any trade
secrets, confidential and proprietary information, internal control
systems
or financial details.
[30]
Michelin alleged that should Mr Morgan use or divulge Michelin’s
proprietary and confidential information there is no doubt that
Michelin will lose sales in favour of Continental to Michelin’s
prejudice. It is clear from such allegation that the concern
relating to the use of Michelin’s proprietary and confidential
information related to Mr Morgan’s employment with Continental,
but would also apply to any other direct competitor.
[31]
Mr Morgan is currently employed, and is no longer employed by
Continental
(or any other direct competitor).
[32]
It is also alleged, in dealing with whether an injury has actually
been
committed or reasonably apprehended, that Michelin is unaware
whether Mr Morgan has disclosed Michelin’s proprietary and
confidential information, but that there is every likelihood that he
may have done so or may do so during the remainder of the restraint
period.
[33]
Michelin contends it is reasonable to assume or accept that Mr Morgan
is likely to have divulged, or may divulge, Michelin’s
proprietary and confidential information on the basis that Michelin
and Continental are direct competitors.
[34]
Michelin only became aware of the termination of Mr Morgan’s
employment
with Continental after the preparation and deposing to of
the Founding Affidavit, and there are therefore no allegations in the
Founding Affidavit suggesting that Mr Morgan will disclose any
confidential or proprietary rights, or breach the provisions of
the
restraint of trade clause in any manner, in respect of any other
competitors of Michelin. Insofar as the Notice of Motion
has
been amended, I have considered such allegations with regard to any
other competitor.
[35]
In the Replying Affidavit, Michelin alleges that the conduct of Mr
Morgan
has been dishonest and refers to the contents of a letter
dated 27 March 2023 as an example of such dishonesty. The
Applicant
also alleges that Mr Morgan is untrustworthy.
[36]
In the Replying Affidavit Michelin contends that it is common cause
that
Mr Morgan bound himself to the restraint, and that he breached
the terms of the restraint in taking up employment with Continental,
and that such employment only terminated after the launch of the
current urgent application.
[37]
The Applicant then alleges that in the circumstances Mr Morgan has
the
onus of showing why the terms of the restraint should not be
given effect to.
[38]
The Applicant alleges that in the event of the relief being sought in
the Notice of Motion (as amended) not being granted, there is nothing
that would prevent Mr Morgan from again breaching the restraint
provisions of the Agreement of Employment, that the threat of such
breach remains, and having regard to Mr Morgan’s “
dishonesty
”
there is every reason to believe that Mr Morgan will, during the
remaining period of the restraint seek to breach it.
[39]
It is also alleged in the Replying Affidavit that the breach of the
terms
of the restraint provisions are common cause, and that such
breach does not disappear by the termination, after the issue of the
urgent application, of the employment with Continental.
[40]
It is also alleged that Mr Morgan’s refusal to accept that the
terms of the restraint of trade are applicable to him, show that the
relief sought is necessary, and that Mr Morgan could easily
take up a
different employment with a competitor of Michelin, and that
accordingly the need for the Application and its continuation
is
entirely of Mr Morgan’s own making.
[41]
Michelin also alleges that Mr Morgan “
could share
”
confidential information that he has, in respect of Michelin with
other competitors of Michelin, and that he “
may do so
”
unless the relief sought is granted.
[42]
In the Replying Affidavit it is also alleged that the conduct of Mr
Morgan
shows that he “
cannot be trusted
” and that
he could take up employment contrary to his restraint, with
competitors of Michelin. It is also alleged that
Mr Morgan does
not believe that the terms of the restraint provisions, that he
agreed to, bind him and his conduct shows that a
Court Order is
necessary to protect Michelin’s interests.
[43]
It is also alleged that at no point has Mr Morgan stated that he
appreciates
the extent of his restraint and will not seek employment
contrary to it.
THE
FIRST RESPONDNET’S CONTENTIONS
[44]
Mr Morgan represented himself in the Urgent Application, and prepared
the affidavits and documents himself.
[45]
Mr Morgan’s Answering Affidavit is somewhat vague, as rather
than
dealing pertinently with specific allegations, Mr Morgan
repeatedly stated that many of the allegations of Michelin “
were
neither admitted nor denied
”.
[46]
Mr Morgan contended that the Application was not urgent, primarily as
Mr Morgan is no longer employed by Continental, and that Michelin
would be afforded redress at any hearing in due course.
[47]
Mr Morgan contended that Michelin has not set out in its founding
papers
the interest that Michelin seeks to protect by way of the
enforcement of the restraint of trade, and that there is no threat to
any interest of Michelin by Mr Morgan.
[48]
Mr Morgan also contends that the duration of the restraint of trade
and
the geographical area applicable to the restraint of trade is
unreasonable.
[49]
Mr Morgan relies on Section 22 of the Constitution, and alleges that
such section provides every citizen with the right to choose their
trade, occupation or position freely, and that the restraint
of trade
is in conflict with Section 22of the Constitution, and is therefore
unreasonable and unconstitutional.
[50]
Mr Morgan also referred to the effects of the Covid-19 pandemic and
suggested
that restraints of trade should not be enforceable during
the Covid-19 pandemic and the continuous effects of such pandemic.
URGENCY
[51]
The principles applicable to urgent applications have been
well-established
by a plethora of case law over time.
[52]
Every
applicant for urgent relief must satisfy the two-stage test, by
setting out explicitly in the founding affidavit the facts
that
firstly, render the application urgent, and secondly, why such an
application cannot be afforded substantial redress at a
hearing in
due course.
[1]
[53]
When assessing an application in order to determine whether the
application
should be heard as an urgent application, the Court must,
as a starting point, accept that the applicant has made out a proper
case for the granting of the relief sought. Once the aspect of
urgency is determined, the merits of the application will be
considered.
[54]
Mr Morgan contended that the Application was not urgent, as Michelin
pursued the relief sought at its leisure. Such contention is
not correct. Michelin launched the urgent application in
the
Eastern Cape Division promptly, and once that application was
dismissed, pursued this Urgent Application without delay.
[55]
The Application is clearly urgent, as if Michelin is entitled to the
relief sought, Mr Morgan must be restrained from breaching the
provisions of the restraint provisions in the Agreement of Employment
without delay.
[56]
It is also clear that it is highly unlikely that Michelin would be
able
to obtain substantial redress at a hearing in due course, as the
extent of any compensation that Michelin may be entitled to, would
be
almost impossible to prove.
[57]
Restraint
of trade applications are, by their very nature, urgent, having
regard to the nature of the harm sought to be protected,
and the
duration of the restraint of trade periods.
[2]
[58]
I am satisfied that this Application should be determined as an
urgent
application, and that it meets the requirements of urgency.
THE
RELEVANT LEGAL PRINCIPLES
[59]
It is trite
that restraint of trade agreements are valid and enforceable in the
Republic of South Africa, and that such agreements
should be honoured
in their terms, unless such restraint of trade provisions
unreasonably restrict a person’s right to trade
or work, or are
in conflict with public policy.
[3]
[60]
A party
that challenges the enforceability of a restraint of trade agreement
bears the burden of alleging and proving that the restraint
of trade
provision is unreasonable or unconstitutional. Restraint of
trade agreements are enforced having regard to the constitutional
dispensation, but the mere fact that Section 22 of the Constitution
confers a right to work, does not prevent restraint of trade
agreements from being enforced. The right to work must be
balanced with the right to enter into a contract which contains
a
restraint of trade provision, on a free and voluntary basis.
[4]
[61]
The
reasonableness or otherwise of a restraint of trade provision was
considered in the matter of
Basson
v Chilwan and Others
[5]
,
where the Court held that the reasonableness should be determined
with reference to the following considerations:
[61.1]
Is there an interest deserving of protection at the termination
of
the agreement?
[61.2]
Is that interest being prejudiced?
[61.3]
If so, how does that interest weight up qualitively and
quantitively
against the interest of the other party not to be economically
inactive and unproductive; and
[61.4]
Is there any other facet of public policy not having anything
to do
with the relationship between the contracting parties which requires
that the restraint should either be enforced or disallowed.
[62]
Had Mr Morgan still been employed by Continental at the time that the
urgent application was heard, I would have been inclined to grant the
relief as sought by Michelin. In my view, the restraint
provisions set out in clause 23.4 are not unreasonable or
unconstitutional, and do not unnecessarily restrain Mr Morgan from
being
economically active.
[63]
I must however give consideration to the fact that at the time that
this
Urgent Application was heard, Mr Morgan was not employed by a
competitor of Michelin, and was not factually breaching any
provisions
of clause 34.
[64]
As set out above, Mr Morgan had breached the provisions of clause 34
during his employment with Continental. Michelin contends that
Mr Morgan may well breach such provisions again before 10 June
2023,
unless interdicted.
[65]
In the
Basson
matter it was held by Botha JA (in a separate
judgment) that:
“
The
incidence of the onus in a case concerning the enforceability of a
contractual position in restraint of trade does not appear
to me in
principle to entail any greater or more significant consequences than
in any other civil case in general. The effect
of it in
practical terms is this: the covenantee seeking to enforce the
restraint need do no more than to invoke the provisions
of the
contract
and
prove the breach
…
”
[6]
[my emphasis]
[66]
In the
matter of
White
River Marketing (Pty) Ltd and Another v Rothwell and Another
[7]
the Court held as follows:
[8]
“
As
for the merits, in the case of a former employer seeking to enforce a
restraint against a former employee, the onus is first
proving the
existence of a restraint obligation that applies to the former
employee. Second, and if a restraint obligation
is shown to
exist, the employer
must prove that the former employee acted in
breach of the restraint obligation
imposed by the restraint.
Once the breach is shown to exist
, the determination turns to
whether the facts, considered as a whole, show that the enforcement
of the restraint would be reasonable
in the circumstances.”
[my
emphasis]
[67]
I am therefore of the view that in order to enforce the restraint
provisions
contained in the Agreement of Employment, Michelin must
show that Mr Morgan is in breach of the restraint provisions.
THE
MERITS OF THE URGENT APPLICATION
[68]
There can be no doubt that Michelin has proven the existence of a
restraint
obligation, as contained in the Agreement of Employment,
that applies to Mr Morgan.
[69]
Mr Morgan is currently unemployed. This is not disputed by
Michelin,
which has accepted that the employment relationship between
Mr Morgan and Continental had terminated.
[70]
I therefore enquired from Applicant’s counsel as to whether the
application had not become moot, in that Mr Morgan was no longer
employed by Continental or any other entity.
[71]
In response to my question, Applicant’s counsel stated that the
Application would not be moot, because Michelin cannot trust Mr
Morgan, and enquired as to what the consequences would be if Mr
Morgan took up employment with a competitor such as Dunlop.
[72]
There is no evidence or suggestion that Mr Morgan is currently in
breach
of the restraint of trade position, or that he has taken up,
or intends to take up, employment with any competitor of Michelin.
Whilst the possibility does exist, such possibility does not
constitute a factual breach.
[73]
It must be recorded that in the Replying Affidavit it was alleged
that
in the event of Mr Morgan joining another competitor of
Michelin, he would again have the opportunity to use confidential
information
of Michelin to the disadvantage of Michelin, and that is
what Michelin seeks to prevent.
[74]
There is however no evidence that Mr Morgan intends joining any
competitor
of Michelin, and any submissions relating to such
possibility are simply assumptions.
[75]
The
Applicant’s counsel also referred me to the matter of
Experian
South Africa (Pty) Ltd v Haynes and Another
[9]
where the Court stated as follows:
“
Where
an applicant as employer has endeavoured to safeguard itself against
the unpoliceable danger of the respondent communicating
its trade
secrets to, or utilising its customer connection on behalf of a rival
concern, after entering that rival concern’s
employ, by
obtaining a restraint preventing the respondent from being employed
by a competitor, the risk that the respondent will
do so is one which
the applicant does not have to run and neither is it incumbent upon
the applicant to enquire into the bona fides
of the respondent, and
demonstrate that he is male fide, before being allowed to enforce its
contractually agreed right to restrain
the respondent from entering
the employ of a direct competitor.”
[76]
The reference to paragraph [21] of the
Experian
matter was in
support of counsel’s contention that the fact that Mr Morgan is
currently unemployed, and that there is currently
no indication that
he will become employed by a direct competitor in the near future, is
irrelevant, on the basis that Michelin
need not run the risk that Mr
Morgan will communicate trade secrets to, or utilise its customer
connections, on behalf of a rival
competitor, and neither is it
incumbent upon Michelin to enquire into the
bona fides
of Mr
Morgan or demonstrate that he is
mala fide
, before being
allowed to enforce the restraint provision.
[77]
Such interpretation does not accord with the established legal
principles
that a party wishing to enforce a restraint provision must
show firstly the existence of the restraint provision and secondly a
breach of the restraint provision.
[78]
In addition, the quoted portion of paragraph [21] of the
Experian
matter cannot be read in isolation, and upon a full reading of
paragraphs [20], [21] and [22] of the
Experian
matter it is
clear that an ex-employer seeking to enforce a restraint provision
must also prove that the ex-employee is going to
be employed by a new
employer that is a competitor of the ex-employer.
[79]
The last sentence of paragraph [21] makes such position clear, and
reads
as follows:
“
In
such circumstances all that the applicant need do is to show that
there is secret information to which the respondent had access,
and
which, in theory, the respondent could transmit to the
new
employer
should he desire to do so.”
[my
emphasis]
[80]
In the
Experian
matter, it is recorded as follows at paragraph
[14]:
“
The
position in our law is, therefore, that a party seeking to enforce a
contract in restraint of trade is required only to invoke
the
restraint agreement and prove a breach thereof. Thereupon, a
party who seeks to avoid the restraint bears the onus to
demonstrate,
on a balance of probabilities, that the restraint agreement is
unenforceable because it is unreasonable.”
[81]
It is
accordingly clear that the
Experian
matter follows the principles set out in the
Basson
matter
and the
White
River Marketing
matter,
which I have referred to above, as well as the other cases referred
to at footnote 4.
[10]
[82]
In the circumstances, there can be no doubt that for Michelin to
succeed
in its application, and to be granted the relief as sought in
its Notice of Motion, Michelin must prove firstly that there is a
restraint of trade agreement applicable to Mr Morgan, and secondly
that Mr Morgan is in breach of such restraint of trade agreement.
[83]
As already set out above, it is clear that there are restraint of
trade
provisions set out in Mr Morgan’s Agreement of Employment
with Michelin, but it has not been established that Mr Morgan is
currently in breach of such restraint provisions.
[84]
In the circumstances, Michelin has not met the requirements that are
necessary for it to be granted the relief as sought in the Notice of
Motion.
ENFORCEABILITY
OF THE RESTRAINT OF TRADE PROVISIONS
[85]
As set out above, Mr Morgan contends that the restraint of trade
provisions
contained in the Agreement of Employment as concluded
between Michelin and Mr Morgan are unconstitutional, unreasonable and
unenforceable.
Mr Morgan also contends that restraint of trade
provisions should not be enforceable during the Covid-19 pandemic and
the continued
results and effects of the Covid-19 pandemic.
[86]
As Mr Mogan is a layperson, and is representing himself, I believe it
is necessary to point out that the finding by me that Michelin is not
entitled to the relief as sought in the Notice of Motion,
does not
mean that I have found that the restraint of trade provisions are
unconstitutional, unreasonable or unenforceable.
COSTS
[87]
Michelin only ascertained after launching the Urgent Application that
Mr Morgan was no longer employed by a competitor of Michelin, and
should not be penalised for the launching of the Urgent Application.
[88]
Whilst I am of the view that Michelin should, at that point, have
reassessed
whether it was prudent to pursue the Application, Mr
Morgan only sought an order to the effect that the Application be
dismissed,
and that each party should pay its own costs.
[89]
Mr Morgan, who represented himself, would, in all likelihood, not
have
incurred any legal costs in the strict procedural legal sense,
and I accordingly believe that it is appropriate that each party
should be ordered to pay its own costs insofar as costs have been
incurred by such parties.
ORDER
[90]
I accordingly make the following Order:
[90.1] The
Application is dismissed.
[90.2] Each
party is to pay its own costs.
G
NEL
[Acting
Judge of the High Court,
Gauteng
Division,
Johannesburg]
APPEARANCES
For
the Applicant:
Adv
JW Steyn
Instructed
by:
AB
Scarrott Attorneys
For
the Respondent:
Appeared
in person
Judgment
heard: 11
April 2023
Judgment
delivered:
02
May 2023
[1]
See:
Luna
Meubelvervaardigers (Edms) Bpk v Makin (t/a Makin’s Furniture
Manufacturers)
1977
(4) SA 135
(W) at 137;
East
Rock Trading 7 (Pty) Ltd and Another v Eagle Valley Granite (Pty)
Ltd and Another
ZAGRJHC
(23 September 2011) at paras 6 and 7.
[2]
Mozart
Ice Cream Franchises (Pty) Ltd v Davidoff
2009
(3) SA 78
(C) at 88.
[3]
Magna
Alloys and Research SA (Pty) Ltd v Ellis
[1984] ZASCA 116
;
1984
(4) SA 874
(A). See also
Reddy
v Siemens Telecommunications (Pty) Ltd
2007 (2) SA 486
(SCA) at para [15] and [16].
[4]
Reddy
v Siemens Telecommunications, supra,
and
Pronto
Computer Solutions (Pty) Ltd v Van der Merwe and Others
2022
JDR 2259 (MN).
[5]
[1993] ZASCA 61
;
1993
(3) SA 742
(A) at 767G
[6]
See
also
DIY
Superstores (Pty) Ltd v Kruger
2022
JDR 0990 (FB) at para [33];
Kalex
Flavours and Fragrances (Pty) Ltd v Muller
2020 JDR 2372 (GJ) at para [8], and
CJP
Chemicals (Pty) Ltd v Dapshis
2021 JDR 1707 (ECP) at para [13].
[7]
2022
JDR 1186 (GJ).
[8]
At
para [7].
[9]
2013
(1) SA 135
(GSJ) at para [21].
[10]
See
also
New
Just Fun Group (Pty) Ltd v Turner
(2018) 39 ILJ 2721 (LC) at para [13]; and
Pronto
Computer Solution (Pty) Ltd v Van der Merwe and Others
2022 JDR 2259 (MN) at para [31].
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