Die Dros (Pty) Ltd and Another v Telefon Beverages CC and Others (3413/02) [2002] ZAWCHC 53; [2003] 1 All SA 164 (C); 2003 (4) SA 207 (C) (3 October 2002)

Die Dros (Pty) Ltd and Another v Telefon Beverages CC and Others (3413/02) [2002] ZAWCHC 53; [2003] 1 All SA 164 (C); 2003 (4) SA 207 (C) (3 October 2002)

The court found that, on the face of the franchise agreement, the restraint of trade clause binds only the first respondent as the designated 'franchisee.' The fourth respondent's obligations are limited to those of a surety and co-principal debtor, which does not impose the restraint personally upon him. The applicants failed to provide sufficient primary facts to support their contention that the fourth respondent used the first respondent as a mere instrumentality or alter ego to circumvent the restraint. As a result, the applicants did not discharge the onus of proving, on a balance of probabilities, that the restraint is binding on the fourth respondent or that he is using the third...

Citation
[2002] ZAWCHC 53
Parties
Applicant: Die Dros (Pty) Ltd; Applicant: Krugkor Franchise (Pty) Ltd; Respondent: Telefon Beverages CC; Respondent: Pietwyn CC; Respondent: Martiq 631 CC; Respondent: Llewellyn Frederick Kapp; Respondent: Lynette Hilda Kapp; Respondent: Metropolitan Life (Pty) Ltd
Court
Western Cape High Court, Cape Town
Jurisdiction
South Africa
Judgment Date
3 October 2002
Case Number
3413/02
Procedural Posture
Urgent Application / Application for Interdict and Referral to Oral Evidence
Outcome
Application dismissed with costs, including costs of two counsel, taxed on a party and party scale.
Judges
Van Reenen
Legal Topics
Restraint of Trade, Franchise Agreement, Piercing Corporate Veil, Suretyship Liability
Commercial and Corporate Civil Procedure Restraint of Trade Franchise Agreement Piercing Corporate Veil Suretyship Liability

Case Brief

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Parties

Die Dros (Pty) Ltd

Applicant

Krugkor Franchise (Pty) Ltd

Applicant

Telefon Beverages CC

Respondent

Pietwyn CC

Respondent

Martiq 631 CC

Respondent

Llewellyn Frederick Kapp

Respondent

Lynette Hilda Kapp

Respondent

Metropolitan Life (Pty) Ltd

Respondent

Procedural Posture

Urgent Application / Application for Interdict and Referral to Oral Evidence

Legal Issues

  1. 1 Whether the restraint of trade clause in the franchise agreement binds the fourth respondent personally.
  2. 2 Whether the fourth respondent is using the third respondent as a front to circumvent the restraint of trade.
  3. 3 Whether the applicants are entitled to an interdict against the respondents.

Ratio Decidendi

The court found that, on the face of the franchise agreement, the restraint of trade clause binds only the first respondent as the designated 'franchisee.' The fourth respondent's obligations are limited to those of a surety and co-principal debtor, which does not impose the restraint personally upon him. The applicants failed to provide sufficient primary facts to support their contention that the fourth respondent used the first respondent as a mere instrumentality or alter ego to circumvent the restraint. As a result, the applicants did not discharge the onus of proving, on a balance of probabilities, that the restraint is binding on the fourth respondent or that he is using the third...

Court Disposition

Application dismissed with costs, including costs of two counsel, taxed on a party and party scale.

Orders

  • The application is dismissed with costs, such costs to be taxed on a party and party scale including the costs occasioned by the employment of two counsel.