Dickinson Holdings Group (Pty) Ltd and Others v Du Plessis and Another (7351/06) [2006] ZAKZHC 10; [2007] 1 All SA 583 (D); 2007 (6) BCLR 671 (D); (2007) 28 ILJ 332 (D) (12 September 2006)

Dickinson Holdings Group (Pty) Ltd and Others v Du Plessis and Another (7351/06) [2006] ZAKZHC 10; [2007] 1 All SA 583 (D); 2007 (6) BCLR 671 (D); (2007) 28 ILJ 332 (D) (12 September 2006)

The court found that the restraint of trade clause in the employment contract was excessively wide, vague, and all-encompassing, lacking clear definitions and extending beyond what was necessary to protect any legitimate interest. The applicant failed to demonstrate the existence of confidential information that was not already known in the marketplace or to competitors. The restraint would unfairly deprive the first respondent of his ability to earn a livelihood in his field of expertise, given the imbalance in bargaining power between the parties. The clause was held to be contrary to public policy and inconsistent with section 22 of the Constitution, which protects the right to freely...

Citation
[2006] ZAKZHC 10
Parties
Applicant: Dickinson Holdings Group (Pty) Limited; Applicant: Dickinson Holdings (Trading) (Pty) Limited; Applicant: Dickinson Refractory Services (Natal) (Pty) Limited; Respondent: Du Plessis, Edmund George Louis; Respondent: RHI Refractories Africa (Pty) Limited
Court
High Courts - Kwazulu Natal
Jurisdiction
South Africa
Judgment Date
12 September 2006
Case Number
7351/06
Procedural Posture
Urgent Application / Final Judgment on Application and Counter Application
Outcome
Application dismissed; counter-application succeeds. The restraint of trade clause is declared unreasonable, contrary to public policy, and unenforceable.
Judges
Ngubane AJ
Legal Topics
Restraint of Trade, Confidential Information, Employment Contracts, Public Policy, Bill of Rights Limitation, Locus Standi
Commercial and Corporate Civil Procedure Constitutional Law Restraint of Trade Confidential Information Employment Contracts Public Policy Bill of Rights Limitation +1 more

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Parties

Dickinson Holdings Group (Pty) Limited

Applicant

Dickinson Holdings (Trading) (Pty) Limited

Applicant

Dickinson Refractory Services (Natal) (Pty) Limited

Applicant

Du Plessis, Edmund George Louis

Respondent

RHI Refractories Africa (Pty) Limited

Respondent

Procedural Posture

Urgent Application / Final Judgment on Application and Counter Application

Legal Issues

  1. 1 Whether the restraint of trade clause in the employment contract is reasonable and enforceable.
  2. 2 Whether the applicant possesses a protectable interest justifying the restraint.
  3. 3 Whether the restraint clause is contrary to public policy and the Constitution.

Ratio Decidendi

The court found that the restraint of trade clause in the employment contract was excessively wide, vague, and all-encompassing, lacking clear definitions and extending beyond what was necessary to protect any legitimate interest. The applicant failed to demonstrate the existence of confidential information that was not already known in the marketplace or to competitors. The restraint would unfairly deprive the first respondent of his ability to earn a livelihood in his field of expertise, given the imbalance in bargaining power between the parties. The clause was held to be contrary to public policy and inconsistent with section 22 of the Constitution, which protects the right to freely...

Court Disposition

Application dismissed; counter-application succeeds. The restraint of trade clause is declared unreasonable, contrary to public policy, and unenforceable.

Orders

  • The application is dismissed.
  • The restraint of trade clause between the applicant and the first respondent is declared unreasonable, contrary to public policy, inconsistent with section 22 of the Constitution, and unenforceable.