Elcentre Group Holdings Ltd. and Others v Jeremiah Lionel Battiss and Others (152/92) [1993] ZASCA 143 (28 September 1993)

Elcentre Group Holdings Ltd. and Others v Jeremiah Lionel Battiss and Others (152/92) [1993] ZASCA 143 (28 September 1993)

The Supreme Court of Appeal held that the restraint of trade clause, when read in the context of the contract as a whole, does not impose a blanket prohibition on the respondents from engaging in any competitive business after leaving the Elcentre group. The clause is not ambiguous or absurd and does not require alteration. The contract envisaged that the respondents could re-enter the field, provided they did not strengthen existing competitors or harm the goodwill of the Elcentre group by taking employees or customers. The appeal was dismissed, and the respondents were entitled to act within the limits set by the contract.

Citation
[1993] ZASCA 143
Parties
Appellant: Elcentre Group Holdings Limited; Appellant: Elcentre Corporation Limited; Appellant: Voltex Holdings Limited; Appellant: Voltex (Proprietary) Limited; Appellant: Multilectronic (Proprietary) Limited; Respondent: Jeremiah Lionel Battiss; Respondent: Thelma Ann Battiss; Respondent: International Cables CC
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
28 September 1993
Case Number
152/92
Procedural Posture
Civil Appeal / Appeal From Full Bench of the Transvaal Provincial Division
Outcome
Appeal dismissed with costs, including costs of two counsel.
Judges
Corbett, Hefer, Nienaber, Van den Heever, Kannemeyer
Legal Topics
Restraint of Trade, Contract Interpretation, Shareholder Agreements
Commercial and Corporate Restraint of Trade Contract Interpretation Shareholder Agreements

Case Brief

Summary, issues, holding and outcome

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Parties

Elcentre Group Holdings Limited

Appellant

Elcentre Corporation Limited

Appellant

Voltex Holdings Limited

Appellant

Voltex (Proprietary) Limited

Appellant

Multilectronic (Proprietary) Limited

Appellant

Jeremiah Lionel Battiss

Respondent

Thelma Ann Battiss

Respondent

International Cables CC

Respondent

Procedural Posture

Civil Appeal / Appeal From Full Bench of the Transvaal Provincial Division

Legal Issues

  1. 1 What is the correct interpretation of the restraint of trade clause in the contract between the parties?
  2. 2 Does the restraint prohibit the respondents from engaging in any competitive business after leaving the Elcentre group?
  3. 3 Is the definition of 'competitive business' in the contract ambiguous or absurd?

Ratio Decidendi

The Supreme Court of Appeal held that the restraint of trade clause, when read in the context of the contract as a whole, does not impose a blanket prohibition on the respondents from engaging in any competitive business after leaving the Elcentre group. The clause is not ambiguous or absurd and does not require alteration. The contract envisaged that the respondents could re-enter the field, provided they did not strengthen existing competitors or harm the goodwill of the Elcentre group by taking employees or customers. The appeal was dismissed, and the respondents were entitled to act within the limits set by the contract.

Court Disposition

Appeal dismissed with costs, including costs of two counsel.

Orders

  • The appeal is dismissed with costs, including the costs of two counsel.