Botha and Another v Carapax Shadeports (Pty) Ltd. (560/1989) [1991] ZASCA 134; 1992 (1) SA 202 (AD); [1992] 3 All SA 768 (AD) (27 September 1991)

Botha and Another v Carapax Shadeports (Pty) Ltd. (560/1989) [1991] ZASCA 134; 1992 (1) SA 202 (AD); [1992] 3 All SA 768 (AD) (27 September 1991)

The Supreme Court of Appeal held that the benefit of the restraint of trade clauses in the appellants' employment contracts formed part of the goodwill of the business and was transferred to the respondent upon the sale of the business as a going concern. The cession of the right to enforce the restraints was effected by the sale and delivery of the business, and no further formalities were required. The Court rejected the argument that the appellants' consent was necessary for the cession, as the obligation not to compete operated after termination of employment and enforcement by the respondent did not materially affect the appellants. The Court further found that the subsequent...

Citation
[1991] ZASCA 134
Parties
Appellant: Christiaan Johannes Botha; Appellant: Heinz-Bernhard Wolters; Respondent: Carapax Shadeports (Pty) Limited
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
27 September 1991
Case Number
560/1989
Procedural Posture
Civil Appeal / Appeal From Order of Transvaal Provincial Division Enforcing Restraint of Trade
Outcome
Appeal dismissed with costs.
Judges
Botha, Smalberger, Milne, F H Grosskopf, Krieger
Legal Topics
Restraint of Trade, Goodwill Transfer, Cession of Contractual Rights
Commercial and Corporate Restraint of Trade Goodwill Transfer Cession of Contractual Rights

Case Brief

Summary, issues, holding and outcome

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Parties

Christiaan Johannes Botha

Appellant

Heinz-Bernhard Wolters

Appellant

Carapax Shadeports (Pty) Limited

Respondent

Procedural Posture

Civil Appeal / Appeal From Order of Transvaal Provincial Division Enforcing Restraint of Trade

Legal Issues

  1. 1 Whether the benefit of restraint of trade clauses in employment contracts passed from Carapax CC to the respondent upon sale of the business and goodwill.
  2. 2 Whether a valid cession of the right to enforce the restraints occurred without the appellants' consent.
  3. 3 Whether subsequent agreements between appellants and respondent novated the restraint provisions.

Ratio Decidendi

The Supreme Court of Appeal held that the benefit of the restraint of trade clauses in the appellants' employment contracts formed part of the goodwill of the business and was transferred to the respondent upon the sale of the business as a going concern. The cession of the right to enforce the restraints was effected by the sale and delivery of the business, and no further formalities were required. The Court rejected the argument that the appellants' consent was necessary for the cession, as the obligation not to compete operated after termination of employment and enforcement by the respondent did not materially affect the appellants. The Court further found that the subsequent...

Court Disposition

Appeal dismissed with costs.

Orders

  • The appeal is dismissed with costs, including the costs of two counsel.
  • Costs of the application for leave to appeal in the court a quo are awarded to the respondent.