Best Advice Financial Services (Pty) Ltd v Smith and Another (1991/2018) [2018] ZAFSHC 46 (10 May 2018)

Best Advice Financial Services (Pty) Ltd v Smith and Another (1991/2018) [2018] ZAFSHC 46 (10 May 2018)

The court found that the restraint of trade covenant existed and was breached by the first respondent, who contacted and solicited the applicant's clients in Mpumalanga after termination of her consultancy. While the applicant's interest in protecting its client base was legitimate, the three-year duration of the restraint was excessive and unreasonable, especially given the first respondent's long-standing relationship with the clients and her need to earn a living. The court held that a six-month restraint period was reasonable under the circumstances, balancing the applicant's protectable interests against the respondent's right to work and support her family. The application was...

Citation
[2018] ZAFSHC 46
Parties
Applicant: Best Advice Financial Services (Pty) Ltd; Respondent: Marie Smith; Respondent: At Risk Advisors (Pty) Ltd
Court
Free State High Court, Bloemfontein
Jurisdiction
South Africa
Judgment Date
10 May 2018
Case Number
1991/2018
Procedural Posture
Urgent Application / Final Interdict Application on Urgent Basis
Outcome
Application granted in part; restraint enforced for six months from 12 January 2018; each party to pay its own costs.
Judges
LJ Lekale
Legal Topics
Restraint of Trade, Enforcement of Contracts, Urgent Interdict, Reasonableness of Covenant
Commercial and Corporate Civil Procedure Restraint of Trade Enforcement of Contracts Urgent Interdict Reasonableness of Covenant

Case Brief

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Parties

Best Advice Financial Services (Pty) Ltd

Applicant

Marie Smith

Respondent

At Risk Advisors (Pty) Ltd

Respondent

Procedural Posture

Urgent Application / Final Interdict Application on Urgent Basis

Legal Issues

  1. 1 Whether the application should be heard as urgent.
  2. 2 Whether the first respondent breached the restraint of trade covenant by soliciting applicant's clients in Mpumalanga.
  3. 3 Whether the restraint clause is reasonable in scope and duration.

Ratio Decidendi

The court found that the restraint of trade covenant existed and was breached by the first respondent, who contacted and solicited the applicant's clients in Mpumalanga after termination of her consultancy. While the applicant's interest in protecting its client base was legitimate, the three-year duration of the restraint was excessive and unreasonable, especially given the first respondent's long-standing relationship with the clients and her need to earn a living. The court held that a six-month restraint period was reasonable under the circumstances, balancing the applicant's protectable interests against the respondent's right to work and support her family. The application was...

Court Disposition

Application granted in part; restraint enforced for six months from 12 January 2018; each party to pay its own costs.

Orders

  • Non-compliance with court rules regarding dies, form, and service is condoned; the matter is heard as an urgent application.
  • The first respondent is interdicted and restrained from involvement in any business similar to the applicant's in Mpumalanga for six months from 12 January 2018.