Macbrothers Catering Equipment (Pty) Ltd v Damianou and Another (J1451/21) [2021] ZALCJHB 456 (14 December 2021)

THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

Not reportable

Case number: J 1451/21

In the matter between:

MACBROTHERS CATERING EQUIPMENT (PTY) LTD Applicant

and

SAVVAS DAMIANOU First

Respondent

FOODSERV SOLUTIONS (PTY) LTD Second

Respondent

Heard: 9 December 2021

Delivered: 14 December 2021

(In view of the measures implemented as a result of the Covid-19 outbreak, this judgment was handed down electronically by circulation

to the parties' representatives by email. The date for hand-down is deemed to be 14 December 2021.)

JUDGMENT

PRINSLOO, J

Introduction:

[1] The Applicant filed an urgent application seeking to interdict and restrain the First Respondent (the Respondent) from inter alia divulging or using information, from enticing customers and or employees of the Applicant away from the Applicant and from being employed by the Second Respondent (Foodserv). I will fully deal with the relief sought infra.

[2] The Respondent opposed the application.

[3] The Respondent resigned from the Applicant’s employ at the end of August 2021 and the urgent application seeking to enforce a restraint of trade was filed on 18 November 2021 and enrolled for hearing on 9 December 2021.

[4] The Respondent took issue with urgency and submitted that the matter is not urgent, alternatively that the urgency is self-created.

[5] The attack on urgency is not without merit. However, I am inclined to deal with the merits of the matter as this is not an application that should burden another Court in future.

Material facts:

[6] The Applicant is in the business of constructing and selling various appliances of varying applications, as well as the servicing and maintenance thereof.

[7] The Respondent was employed by the Applicant on 15 January 2008 as a sales representative. The parties concluded a written employment

contract and in clause 14 of the contract the parties agreed that:

The employee shall not at any time divulge to any person any trade secret or any other confidential information concerning the employer’s business without the written consent of the employer.

[8] Subsequent to the conclusion of the employment contract and on 30 June 2012 the parties concluded a separate restraint of trade agreement. On 5 July 2016 the parties entered into a second restraint of trade agreement (the agreement), which is the agreement the Applicant now seeks to enforce.

[9] The Respondent fulfilled the role of a sales representative and he also coordinated various projects of the Applicant. In executing his duties, he would meet with potential clients or cold call prospective clients and after successfully obtaining a project, the proposed area would be measured and the brief of the client would be considered. This entailed engagement with designers, formulating a layout and recommending equipment to the client. A quotation would then be prepared and based on the client’s approval, the Respondent would meet again with the client to explain the proposal and to facilitate any changes with regard to brand preferences. Once the quotation is accepted, the Respondent would place orders with the purchasing department. What follows is a lengthy and detailed process of engagement with various departments, architects, contractors and the client, which is coordinated by the Respondent. The process ends after all the necessary tests and approvals were passed and the venue finally opens.

[10] The Respondent resigned from the Applicant’s employ in August 2021 and his last day of service was 27 August 2021.

[11] It is common cause that the Respondent took up employment with Foodserv, as an export manager. Foodserv is in the business of providing

solutions for commercial and industrial kitchen concepts, as well as food preparation equipment to the food services industry. Foodserv is listed as a ‘prescribed competitor’ in the restraint agreement.

The urgent application

[12] The Applicant approached the Court on an urgent basis to enforce the terms of the restraint of trade agreement, as contained in clause 4 of the agreement.

[13] In the notice of motion, the Applicant seeks an order to interdict and restrain the Respondent from:

1. For any reason whatsoever, directly or indirectly, divulging and/or disclosing and/or using any information and/or knowledge acquired by the First Respondent relating to trade secrets and/or trademarks and/or patents and/or secret process and/or technical information

and/or know-how of the Applicant to any person whatsoever, whether for the First Respondent’s benefit or otherwise;

2. Enticing customers and/or employees of the Applicant away from the Applicant.

3. An Order interdicting and restraining the First Respondent until 27 February 2022 and within the Republic of South Africa from being

employed and/or interested either directly or indirectly and whether as a director, partner, financier, advisor, shareholder or in any way whatsoever, in a business similar to that being carried on by the Applicant or in any business which is likely to compete with the business being conducted by the Applicant, and in particular the Second Respondent, at the time of termination of the First Respondent, at the time of termination of the First Respondent’s employment.

[14] The Applicant has approached this Court for relief on the following grounds: the Respondent is in breach of the agreement in that he is employed by Foodserv, a prescribed competitor, operating a business similar to that of the Applicant and in the same industry and because the Respondent had provided sensitive information, pertaining to the Applicant’s employees and clients, to Foodserv.

[15] The Applicant submitted that for the relief sought, it only has to establish the existence of the restraint agreement and the breach

thereof.

[16] The Respondent opposes the relief sought in this application on grounds I will fully deal with infra.

[17] It is evident from the notice of motion that the Applicant seeks an order to interdict and restrain the Respondent from divulging, disclosing or using any information or knowledge relating to trademarks, patents and technical information of the Applicant. In the application before this Court no case is made out in respect of any trademarks, patents or technical information belonging to the Applicant. In fact, trademarks, patents or technical information are not even mentioned in the pleaded facts and the Applicant’s affidavits do not support the relief sought in respect of the aforesaid. The relief sought, as it appears from the averments in the founding affidavit, revolves around the issue of trade secrets, which will be fully addressed infra.

The applicable legal principles

[18] A party seeking to enforce a contract in restraint of trade is required to invoke the restraint agreement and prove a breach thereof.

Thereupon a respondent who seeks to avoid the restraint, bears an onus to demonstrate, on a balance of probabilities, that the

restraint agreement is unenforceable because it is unreasonable.[1]

[19] The test set out in Basson v Chilwan and Others[2] (Basson), to determine the reasonableness or otherwise of a restraint of trade provision is the following –

1. Is there an interest of the one party, which is deserving of protection at the termination of the agreement?

2. Is such interest being prejudiced by the other party?

3. If so, does such interest so weigh up qualitatively and quantitatively against the interest of the latter party that the latter should not be economically inactive and unproductive?

4. Is there another facet of public policy having nothing to do with the relationship between the parties but which requires that the restraint should either be maintained or rejected?

[20] In Kwik Kopy (SA) (Pty) Ltd v van Haarlem and Another,[3] a further consideration was added namely whether the restraint goes further than is necessary to protect the interest.

[21] In Jonsson Workwear v Williamson and another[4] (Jonsson) the Court summarised the factors to be considered and held that:

‘In simple terms therefore, and what needs to be considered in determining whether or not the enforcement of a restraint of trade

would be reasonable, are five issues, being (a) the existence of a protectable interest, (b) the breach of such protectable interest, (c) a quantitative and qualitative weigh off the respective interests of the parties, (d) general considerations of public interest, and (e) whether the restraint goes further than necessary to protect the relevant interest. All these considerations need to be determined as a whole, as part of a value judgment to be exercised, in order to finally conclude whether or not the restraint should be enforced.’

[22] Insofar as the first leg of the test in Basson is concerned, it is well established that the proprietary interests that can be protected by a restraint agreement are essentially of two kinds, namely –

1. All confidential matter which is useful for the carrying on of the business and which could be used by a competitor, if disclosed to the competitor, to gain a relative competitive advantage. Such confidential material is compendiously referred to as “trade secrets”; and

2. The relationships with customers, potential customers, suppliers and others that make up what is compendiously referred to as the “trade connections” of the business.[5]

[23] Whether information constitutes a trade secret is a factual question. For information to be confidential it must be –

1. capable of application in trade or industry, that is, it must be useful and not be public knowledge and property;

2. known only to a restricted number of people or a closed circle; and

3. of economic value to the person seeking to protect it.[6]

[24] As to customer connection, the need of an employer to protect its trade connections arises where the employee has access to customers and is in a position to build up a particular relationship with a customer so that when she leaves the employer’s service she could easily induce the customers to follow him to a new business.

[25] In Labournet (Pty) Ltd v Jankielsohn and Another (Labournet)[7] the LAC held that:

The enquiry into the reasonableness of the restraint is essentially a value judgment that encompasses a consideration of two policies,

namely the duty on parties to comply with their contractual obligations and the right to freely choose and practice a trade, occupation or profession. A restraint is only reasonable and enforceable if it serves to protect an interest, which, in terms of the law, requires and deserves protection. The list of such interests is not closed, but confidential information (or trade secrets) and

customer (or trade) connections are recognised as being such interests. To seek to enforce a restraint merely in order to prevent

an employee from competing with an employer is not reasonable.

According to the Appellate Division in Basson v Chilwan and Others, the following questions require investigation, namely, whether the party who seeks to restrain has a protectable interest, and whether it is being prejudiced by the party sought to be restrained. Further, if there is such an interest – to determine how that interest weighs up, qualitatively and quantitatively, against the interest of the other party to be economically active and productive. Fourthly, to ascertain whether there are any other public policy considerations which require that the restraint be enforced. If the interest of the party to be restrained outweighs the interest of the restrainer – the restraint is unreasonable and unenforceable. (Footnotes omitted)

[26] It is within the context of the aforesaid principles that this application is to be decided.

The Applicant’s onus

[27] The Applicant has to establish that the Respondent furnished the restraint undertakings sought to be enforced and that he has breached those undertakings in the respects as alleged by the Applicant.

The contract

[28] It is common cause that the Respondent concluded the agreement, containing the restraint of trade undertakings sought to be enforced

by the Applicant.

[29] In clause 4.2 of the agreement the Respondent acknowledged that, by virtue of his association with the Respondent, he has had and will have access to the Applicant’s trade secrets and confidential information, including inter alia the Applicant’s marketing strategies, knowledge of and influence over clients and business associates of the Applicant, the names of clients and prospective clients as well as information relating to such clients and their requirements and the Applicant’s

know-how and expertise.

[30] In clause 4.3. of the agreement it was agreed that:

To protect the proprietary interest of the company and the business and the Mac Brothers Group, the employee undertakes in favour of the company and the business and the Mac Brothers Group and their respective successors-in-title or assigns that, whilst he or she is in the employ of the company or of any member of the Mac Brothers Group and for a period of 6 (six) months thereafter, (“the restraint period”), he or she shall not, directly or indirectly anywhere in RSA (“the restraint area”):

4.3.1 deal with (saves as may be required for the performance of his or her obligations in terms of this agreement) or solicit, interfere with, entice or endeavor to entice away from the company or the business, any person (whether natural or legal) who or which during the period of this agreement or at the termination date was a client (which term shall include subsidiary, affiliated and associated entities of clients) of, or was accustomed to dealing with, the company or the business or the Mac Brothers Group;

4.3.2 be interested in any manner whatsoever (and without derogating from the generality of the aforegoing whether directly or indirectly, as shareholder. Member, proprietor, employee, consultant, agent, counsellor or otherwise) in any business or undertaking whose activities are similar to or in competition with those of the company or the business or the Mac Brothers Group including but not limited to the prescribed competitors, carried on during the period of this agreement or at the date of its termination.

[31] The Applicant’s argument is that it has a protectable interest in that the Respondent knows that Applicant’s clients and has excellent relationships with those clients. Relationships with customers, potential customers and suppliers are interest worthy of protection.

[32] The Applicant further submitted that the Respondent possesses knowledge that is capable of being used by the Respondent and his new employer.

The Respondent’s breach

[33] The Second Respondent is a direct competitor of the Applicant and is specifically included and described in the agreement as ‘prescribed

competitor’.

[34] It is common cause that the Respondent took up employment with the Second Respondent in the capacity as an export manager and that he is still so employed. It is not disputed that taking up employment with the Applicant’s direct competitor constitutes a breach of the agreement.

The Respondents’ onus

[35] In seeking to avoid the enforcement of the restraint, the Respondent bears the onus to show that the restraint against him should not be enforced because to do so would be, on an application of the test in Basson, unreasonable and contrary to public policy.

[36] The Respondent opposes the relief sought in this application on the following grounds: His position at the Applicant entailed that he had performed 90% of his duties outside the borders of South Africa and although he sold and provided services to local companies within South Africa, it constituted a minute portion of the time he had spent on performing his duties. His position at Foodserv is concerned with export business and has nothing to do with business inside South Africa. The Respondent does not sell to or solicit business from any client of the Applicant within South Africa and he is economically active on behalf of Foodserv only outside the borders of South Africa.

[37] Furthermore, the restraint of trade covenant is impermissibly wide as the enforcement thereof would leave the Respondent economically inactive. He further submitted that by seeking to restrain his continued employment with Foodserv, the Applicant is not protecting its interests within the borders of South Africa, but is effectively extending the operation of the restraint of trade.

[38] The Respondent submitted that the Applicant’s attempt to the enforcement of the restraint of trade and preclude him from being

employed by Foodserv, is for an ulterior purpose and not to seek to protect clients or business interest in South Africa, but is rather an attempt to stifle competition.

[39] The Applicant seeks to enforce the restraint outside the borders of South Africa and axiomatically outside the terms of the agreement and the jurisdiction of this Court. The Applicant is not seeking to protect its local interests, but is seeking to extend the operation of the restraint of trade to an area outside the borders of South Africa.

Analysis

[40] In Esquire System Technology (Pty) Ltd t/a Esquire Technologies v Cronjé and another[8] the position with regard to restraints of trade in our law, having considered the position before and after the constitutional dispensation, has been summarised as follows:

1. Covenants in restraint of trade are valid. Like all other contractual stipulations, however, they are unenforceable when, and to the extent that, their enforcement would be contrary to public policy. It is against public policy to enforce a covenant which is unreasonable, one which unreasonably restricts the covenantor's freedom to trade or to work.

2. Insofar as it has that effect, the covenant will not therefore be enforced. Whether it is indeed unreasonable must be determined with reference to the circumstances of the case.

3. Such circumstances are not limited to those that existed when the parties entered into the covenant. Account must also be taken of what has happened since then and, in particular, of the situation prevailing at the time the enforcement is sought.

4. Where the onus lies in a particular case is a consequence of the substantive law on the issue.

5. What that calls for is a value judgment, rather than a determination of what facts have been proved, and the incidence of the onus accordingly plays no role.

6. A court must make a value judgment with two principal policy considerations in mind in determining the reasonableness of a restraint:

6.1. The first is that the public interest required that parties should comply with their contractual obligations, a notion expressed by the maxim pacta servanda sunt.

6.2. The second is that all persons should in the interests of society be productive and be permitted to engage in trade and commerce or the professions.

[41] The point of departure is that restraint of trade agreements are valid. The restraint of trade clause will be enforceable if there is an interest that requires protection and insofar as it is reasonable.

[42] The starting point in an application such as this one, is that a party seeking to enforce a restraint of trade is required to invoke the restraint agreement and prove a breach thereof. If the restraint is reasonable, it will be enforceable.

[43] The party seeking to avoid the restraint, bears the onus to show that on a balance of probabilities that the restraint agreement is unenforceable because it is unreasonable.[9]

[44] Whether a restraint of trade clause will ultimately be enforceable, is a separate question that requires an assessment of the reasonableness

thereof.

[45] The first question this Court has to consider is whether the Applicant, as the party who seeks to restrain, has a protectable interest, and whether it is being prejudiced by the Respondent. Further, if there is such an interest – to determine how that interest weighs up, qualitatively and quantitatively, against the interest of the Respondent to be economically active and productive.

[46] The Applicant’s case is that its confidential information and customer connections are protectable interests. I will deal with each one in turn.

Confidential information

[47] In Experian SA (Pty) Ltd v Haynes & another[10] the issue of confidential information was considered and the Court held that:

‘It is trite that the law enjoins confidential information with protection. Whether information constitutes a trade secret is a factual question. For information to be confidential it must be capable of application in the trade or industry, that is, it

must be useful and not be public knowledge and property; known only to a restricted number of people or a closed circle; and be of economic value to the person seeking to protect it.’

[48] In Jonnson the Court found that:

‘What thus must now be done, as part of the value judgment to be exercised in this matter, is to determine whether there is a case made out on the proper accepted facts as to whether the information the first respondent had access to whilst employed with the applicant would fall within the parameters of what could be classified as confidential information in terms of the above authorities, and also whether this information would be of benefit to the second respondent as employer of the first respondent.’

[49] It is evident from the Applicant’s founding affidavit that a material portion of the affidavit was devoted to setting out the terms of the first restraint of trade agreement, which was no longer applicable and which was not the agreement the Applicant sought to enforce. The Applicant also repeated the terms of the second restraint of trade agreement in great detail and it too took up a material portion of the affidavit.

[50] In support if its case the Applicant stated that during his employment, the Respondent was, at the Applicant’s cost and expense,

trained in the business operations, with specific reference to his duties as a sales representative. Further that the Respondent was furnished with lists of customers and their relevant contact information and that he was provided with the tools and assistance

necessary for him to perform his job as a sales representative. In the performance of his duties, the Respondent had access to and acquired extensive knowledge of the Applicant’s marketing techniques, the manner in which the Applicant manages and collates

customer needs and information, the names and contact numbers of and the products purchased by customers, the manner in which the

Applicant structured transactions with its customers and the manner in which it adjusted pricing and its mark-up for various customers.

[51] The Applicant submitted that it operates in a highly competitive industry and that any information concerning pricing, mark-up and the manner in which the transactions are structured in the hands of a competitor, will have dire consequences for the Applicant.

[52] Foodserv is a direct competitor of the Applicant and it was submitted that the Respondent provided sensitive information to Foodserv pertaining to the Applicant’s employees and clients. The aforesaid averments are made based on text messages discovered on the Respondent’s business cellular phone, from which it could be gleaned that the Respondent attempted to bring Foodserv in contact with another employee of the Respondent and that he had informed Foodserv of his ability to entice a prospective customer away from the Applicant and to instead engage with Foodserv.

[53] It is evident from the content of the text messages, which were attached to the Applicant’s founding affidavit, that the Respondent had a conversation with Foodserv’s Mario regarding taking up employment with Foodserv. Mario asked the Respondent whether he knew “of anyone worth looking at in Durban” and he responded positively “Sheldon is the branch manager – you can chat to him.”

[54] The aforesaid conversation could hardly be understood to be providing ‘sensitive’ information pertaining to the Applicant’s

clients or employees to Foodserv. In any event, ‘sensitive information’ is not the test that applies in enforcing a

restraint of trade agreement. The information has to be confidential to be protectable and as such it must be capable of application in the trade or industry, it must be useful and not be public knowledge and property; known only to a restricted number of people or a closed circle; and be of economic value to the person seeking to protect it.

[55] The Respondent in his opposing papers denied that attempted to solicit or persuade any employee of the Applicant to leave its employ. This averment is not disputed or rebutted by the Applicant, notwithstanding the fact that a replying affidavit was filed in answer to the Respondent’s averments.

[56] In his opposing affidavit the Respondent denied that he is in possession of any confidential information pertaining to the Applicant. He explained that the Applicant’s proprietary information was stored on its computer system and when drafting a quotation, all information was pulled through to the quote. All that remains is vaguely recollected information which is not commercially of value and which would have changed substantially since he had left the Applicant’s employ. The pricing in the industry varies according to the applicable exchange rate and changes in costing of raw material and labour costs in the manufacturing of the product.

[57] The Respondent further explained that he is but one cog in the process of an installation of a kitchen and the conclusion of a deal, as it does not solely rest upon him, but involves a team.

[58] The Respondent further denied that the Applicant had any secret or confidential marketing techniques, as nearly all the projects

entailed a 50% deposit, a 45% progress payment before delivery and the balance upon commissioning.

[59] The Respondent further submitted that specific margin requirements would vary as per currency fluctuations and changes in manufacturing costs, which would have changed a number of times in the past four months.

[60] In response to the aforesaid averments, the Applicant presented no more than a bare denial and merely insisted that Foodserv is listed as a direct competitor in the agreement, which the Respondent had signed and agreed to.

[61] The Respondent denied that he was provided with a list of customers and their contact information, as alleged by the Applicant. The Applicant was invited to provide proof thereof. The Respondent submitted that he had generated his own list of customers over the years. In reply the Applicant stated that the ‘list of customers’ referred to was handed to the Respondent informally throughout the duration of his employment. It was explained that whenever the Respondent was required to assist a customer “he would be given the name and contact details of that particular customer. This was handed to him by his managers and was most often done verbally.” The Applicant went further to claim that the Respondent’s self-generated list of customers is a protectable interest of the Applicant.

[62] It is evident that there was no customer list provided to the Respondent and that he was provided with no more than the details of a customer on an ad hoc basis, as and when assistance was needed.

[63] In Labournet the LAC pointed out that Labournet liberally resorted to generalities and did not deal with specifics, even though it was essential for Labournet to deal specifically with Jankielsohn as an individual it sought to restrain.

[64] In David Crouch Marketing CC v du Plessis[11] the Court also dealt with the issue of confidential information and said that where a former employer wishes to rely on or enforce a restraint of trade agreement in order to protect secrets and confidential information, it must show that the information, know-how, technology or method is unique and peculiar to its business and that such information is not public property or that it falls within the public's knowledge. In other words, the former employer must show that the interest that it has in the information it seeks to protect, is indeed worthy of protection. Not all information obtained by the employee during the course of his employment will be secret or confidential. The Court held that:

‘The applicant in its founding affidavit also submits that its modus operandi and products as well as its services are indeed confidential

and worthy of protection. The applicant again does not elaborate or give any details as to why these products, modus operandi and

services are worthy of protection. Why these aspects are so unique is not clear from the founding affidavit. I am again in agreement with the submission advanced on behalf of the respondent that, without elaborating on the details of the applicant's alleged unique modus operandi, products and services, it must be accepted that the applicant has no unique modus operandi, products or services

that are worthy of protection.’

[65] The Applicant has to make out a case that the Respondent is in possession of confidential information, which is not in the public domain and which could be used to the advantage of Foodserv and to the Applicant’s detriment. These requirements apply because not all information obtained by an employee during the course of his employment or which he or she had access to during the execution of duties, will be secret or confidential.

Customer connections

[66] In Oxygen Suppliers (Pty) Ltd t/a Vital Aire v Meintjes and another[12] the Court in considering the question whether there was indeed a protectable interest held that:

‘As I pointed out in Esquire Technologies, a restraint is valid if there is a proprietary interest which justifies protection. Those interests are usually in the nature of trade secrets, know-how, pricing or customer connections. Therefore, a restraint would be an enforceable restriction on the activities of an employee who (for example) had access to the company's customers and could use his/her relations with the company's customers to the advantage of a competitor and to the detriment of the company.’

[67] In Morris (Herbert) Ltd v Saxelby[13] it was held that the relationship must be such that the employee acquires “such personal knowledge of and influence over the customers of his employer … as will enable him (the servant or apprentice), if competition were allowed, to take advantage of his employer’s trade connection.”

[68] In Rawlins and Another v Caravantruck (Pty) Ltd[14] the Court considered whether there was an attachment between the employee to be restrained and the customer and held that:

‘Whether the criteria referred to are satisfied is essentially a question of fact in each case, and in many, one of degree. Much will depend on the duties of the employee; his personality; the frequency and duration of contact between him and the customers; where such contact takes place; what knowledge he gains of their requirements and business; the general nature of their relationship (including whether an attachment is formed between them, the extent to which customers rely H on the employee and how personal their association is); how competitive the rival businesses are; in the case of a salesman, the type of product being sold; and whether there is evidence that customers were lost after the employee left.’

[69] In Labournet the LAC held that:

‘Regarding the other protectable interests claimed by Labournet, namely, customer or trade connections. They are protectable provided it is established on the facts that the attachment, between the employee sought to be restrained and those customers, was of such a nature that the employee would be able to induce those customers to follow him or her.’

[70] In New Justfun Group (Pty) Ltd v Turner and Others[15] the Court held with reference to customer connections that “it is sufficient for the applicant to show that the customer contact exists and that they can be exploited by the former employee.”

[71] A customer connection is a protectable interest and should be protected provided that it is established that the connection is of such a nature that the employee would be able to induce the employer’s customers to follow him or her.

[72] It is evident from the dicta in the authorities referred to that the Applicant has to show that the customer connection exists and that it could be exploited.

[73] In the Applicant’s founding affidavit, the case made out is that the Respondent was furnished with customer information to pursue the customers and to build relationships with them and that he was responsible to engage with new customers and to communicate with them.

[74] The only reference made to customers specifically was the averment that the Respondent had informed Mario of his ability to entice a prospective customer away from the Applicant and to instead engage with Foodserv. This is certainly not evident from the conversation

with Mario, as no prospective customer of the Applicant was even mentioned in the conversation.

[75] In argument Mr Bornman for the Applicant submitted that the customer referred to was indeed Mr van Rooyen. This argument is not

sustainable for a number of reasons. Firstly, nowhere in the founding affidavit did the Applicant make an allegation that Mr van Rooyen was its customer, worthy of protection and that he was indeed the customer the Respondent would solicit to do business with Foodserv, instead of the Applicant. In fact, the name of Mr van Rooyen is not mentioned in the Applicant’s founding affidavit at all. The only reference is the mention of the text message conversation between the Respondent and Mr van Rooyen, attached to the Applicant’s founding affidavit.

[76] The Applicant made out no case to show that Mr van Rooyen was a customer (or even a supplier) of the Applicant.

[77] It is further evident from the text messages annexed to the Applicant’s founding affidavit that in the text conversation which took place between the Respondent and Mr Leon van Rooyen, Mr van Rooyen asked the Respondent whether he could call him “to talk about Foodserv” and the Respondent replied “Cool.”

[78] In his opposing affidavit, the Respondent denied that he had attempted to solicit any of the Applicant’s customers. He further

explained that Mr van Rooyen owns a company, Temp-U-Air, which supplies air conditioning units. Mr van Rooyen is based in Luanda,

Angola and he is an installer in Angola. As such the restraint of trade agreement does not cover Mr van Rooyen, as the restraint of trade agreement applies within the borders of South Africa.

[79] In its replying affidavit and responding to the aforesaid version presented by the Respondent, the Applicant stated that “Mr van Rooyen permanently lives and resides in Cape Town with his family, whilst still conducting business.” It is evident that there is no averment to the effect that Mr van Rooyen is a customer or supplier of the Applicant or a denial that he conducts business in Angola, which falls outside the area of the restraint agreement.

[80] In his opposing affidavit the Respondent submitted that the Applicant is required to demonstrate that he has the ability to ‘carry the customer in his pocket’ and that by the mere fact of his employment with Foodserv, that the customers would follow him. He further submitted that he has relationships with the Applicant’s customers, but they are all located outside the Republic of South Africa and that the Applicant has no restraint which is operable outside of the borders of South Africa.

[81] The Respondent submitted that the single most dominant factor in the industry is price and as the industry is price sensitive and all comes down to the most affordable price per item. Not a single customer would follow him because of the relationship that exists

between them, price is the dominant factor.

[82] The Respondent’s version is that he does not do business in South Africa, he does not sell to or solicit from any South African client of the Applicant and he is only active outside the borders of South Africa.

[83] The Applicant’s answer to this is that what the Respondent’s duties, whilst employed by Foodserv, are unknown to it. It is evidently not disputed that the Respondent is only active on behalf of Foodserv, outside of the borders of South Africa.

[84] In its replying affidavit, the Applicant conceded that it has no restraint agreement which operates outside South Africa, but submitted that the Respondent has excellent relationships with all the Applicant’s customers, not only the ones abroad. Foodserv is based in South Africa and it matters not from which country its customers are. This case was not made out in the founding affidavit.

Conclusion

[85] The proper approach to determining the facts was set out in Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd[16]. Thus, when factual disputes arise in circumstances where the applicant seeks final relief, the relief should be granted in favour

of the applicant only if the facts averred in the applicant’s affidavits, which have been admitted by the respondent, together with the facts alleged by the respondent, justify the order prayed for.

[86] The facts in casu are to be determined by applying the Plascon-Evans test.

[87] The Applicant’s case in short is that the restraint agreement is breached by the fact that the Respondent took up employment with Foodserv, which is prohibited in terms of the restraint agreement, as Foodserv is a direct competitor and listed as such in the agreement.

[88] I accept that as Foodserv is a direct competitor of the Applicant, the Respondent’s employment with Foodserv would prima facie be a breach of the restraint of trade agreement and would infringe the Applicant’s protectable interest. However, this is always subject to the determination of the existence of a protectable interest and an actual infringement, based on the facts.

[89] The question is this: is there an interest deserving of protection and is such an interest being prejudiced?

[90] Considering all the facts placed before me and applying the Plascon-Evans test, the answer is no. I will deal with the reasons infra.

[91] In respect of confidential information, the Applicant failed to put convincing evidence before this Court to show that there is

confidential information which requires protection. Unsubstantiated and vague allegations in respect of marketing techniques, the manner in which the Applicant manages and collates customer needs and information, the names and contact numbers of and the products purchased by customers, the manner in which the Applicant structured transactions with its customers and the manner in which it adjusted pricing and its mark-up for various customers were made. It was not explained why it is regarded as confidential and why or how it would be useful to Foodserv.

[92] The Respondent on the other hand, dealt with the allegations regarding confidential information in detail and his case that he was not in possession of any confidential information, which could be of value to Foodserv, was not disputed. The Respondent did not just baldly deny the Applicant’s case regarding confidential information, but he explained it in the context of his employment and duties with the Applicant.

[93] The Applicant made bald and unsubstantiated allegations in this regard and has failed to convince me that there is indeed confidential information that requires protection as being capable of being applicable in trade or industry, not in the public knowledge and property, known only to a restricted number of people or a close circle, and of economic value to the Applicant.

[94] The averments made by the Applicant were lacking in substance and were of such a generalised nature, that it was of no assistance to obtain the relief sought from this Court.

[95] In respect of customer connections, there was no evidence, let alone convincing evidence, placed before this Court to show that the Respondent has a special relationship with the Applicant’s customer and that because of the relationships he had forged during his employ with the Applicant, the Applicant will lose those customers as they will follow the Respondent, where ever he goes.

[96] The only customer referred to, according to Mr Bornman’s argument, was Mr van Rooyen. I already dealt with the reasons why this argument was unsustainable and not convincing.

[97] Once again, in respect of customer connections the Respondent did not merely put up a bare denial, but he provided a version and context, which were not disputed by the Applicant, notwithstanding the fact that a replying affidavit was filed.

[98] The facts placed before this Court shows that the Respondent was provided with names of customers, as and when a job had to be done and there is no case made out that he had forged strong relationships with the customers, to the extent that they will follow him. Not a single averment has been made to that effect and the Applicant failed to demonstrate that the Respondent would be able to induce the Applicant’s customers to follow him to another employer.

[99] In my view, the Applicant dismally failed to demonstrate that it has a protectable interest.

[100] Furthermore, it has to be shown that the Respondent's employment with Foodserv would infringe on any protectable interest. This is a factual question, based on what the Respondent does at Foodserv and what possible risks the Applicant would be exposed to if he is allowed to remain employed by Foodserv.

[101] It is undisputed that the Respondent’s position at Foodserv is concerned with export business and has nothing to do with business

inside South Africa. He does not sell to or solicit business from any client of the Applicant within South Africa and he is economically

active on behalf of Foodserv only outside the borders of South Africa. It is common cause that the agreement the Applicant seeks to enforce is applicable within the borders of South Africa and there is no restraint in respect of customers or the like applicable outside of the area of the restraint.

[102] The agreement provides that for a period of 6 months the Respondent shall not, directly or indirectly anywhere in the Republic of South Africa (“the restraint area”) deal with or solicit, interfere with, entice or endeavor to entice away from the company or the business, any person (whether natural or legal) who or which during the period of this agreement or at the termination date was a client of, or was accustomed to dealing with, the company or the business or the Mac Brothers Group.

[103] There is not a single averment made by the Applicant to show why or how its interests will be infringed by the Respondent, who operates only outside of South Africa and outside of the area of the restraint. In seeking to restrain the Respondent’s continued employment with Foodserv, in circumstances where he does no business within the area of application of the restraint agreement, the Applicant is not seeking to protect its interests within the borders of South Africa, but is effectively seeking to extend the operation of the restraint to an area (and customers) outside the borders of South Africa.

[104] The Applicant has not made one factual allegation that the Respondent indeed infringed the restraint agreement and in saying that, I am mindful of the fact that it is sufficient for the Applicant to show that he could do so. However, on the facts before me, I am not convinced that there is indeed or will be an infringement on the Applicant’s interests.

[105] The Applicant failed to demonstrate how its interests will be infringed upon in circumstances where it is undisputed that the Respondent has no dealings with any customers within the borders of South Africa.

[106] In my view the Applicant seeks to enforce the restraint beyond its terms and the Respondent’s contractual undertakings.

[107] Having found that there is no protectable interest and that there is no infringement, there is no need to consider the other questions set out in Basson as the need to consider the other questions relating to the interests of the parties and the public policy, only arises if there is a protectable interest that is being prejudiced, which is in casu not the case.

[108] The request for a final interdict must be satisfied on three essential requisites, namely –

1. a clear right of the party asserting it;

2. an injury actually committed or reasonably apprehended; and

3. the absence of any other satisfactory remedy that may have been available to the party seeking the interdict.[17]

[109] The Applicant failed to demonstrate the very first requirement of a clear right in this matter and the enquiry should go no further.

Costs

[110] The Applicant elected to invoke this Court’s jurisdiction under section 77(3) of the Basic Conditions of Employment Act[18], a jurisdiction that the Court exercises concurrently with the civil courts. In these circumstances the rule applied in those courts that costs ordinarily follow the result, is to be applied.

[111] In casu both parties also argued for costs and I can see no reason why costs should not follow the result.

Order

In the premises, I make the following order:

1. The application is dismissed with costs.

Connie Prinsloo

Judge of the Labour Court of South Africa

Representatives:

For the Applicant: Advocate

J C Bornman

Instructed by: JVK

Attorneys

For the First Respondent: Advocate R Pottas

Instructed by: Michael

Popper & Associates Attorneys

[1] Basson v Chilwan and Others 1993 SA 742 (A) at 7761I-J; Magna Alloys and Research (SA) (Pty) Ltd vEllis 486 (SCA) at [10] to [14], pp 493E/F to 496D; Reddy v Siemens Telecommunications (Pty) Ltd 2007 (2) SA 406 (SCA); Den Braven SA (Pty) Ltd v Pillay and another 2008 (6) SA 229 (D); Experian South Africa (Pty) Ltd v Haynes and another 2013 (1) SA 135.

[2] 1993 SA 742 (A) at 767 C-H.

[3] 1999 (1) SA 472 (W) at 484E.

[4] (2014) 35 ILJ 712 (LC).

[5] Sibex Engineering Services (Pty) Limited v Van Wyk and Another 1991 (2) SA 482 (T) at 502D/E-F

[6] Townsend Productions (Pty) Ltd v Leech and Others 2001 (4) SA 33 (C) at 53J-54B; Mossgas (Pty) Ltd v Sasol Technology (Pty) Ltd [1999] 3 B All SA 321 (W) at 333F, Walter McNaughten (Pty) Ltd v Schwartz [2003] 1 All SA 770; 2004 (3) SA 381 (C) at 389.

[7] [2017] 5 BLLR 466(LAC), (2017) 38 ILJ 1302 (LAC).

[8] (2011) 32 ILJ 601 (LC).

[9] Basson v Chilwan and Others 1993 SA 742 (A) at 7761I-J; Magna Alloys and Research (SA) (Pty) Ltd v Ellis 486 (SCA) at [10] to [14], pp 493E/F to 496D; Reddy v Siemens Telecommunications (Pty) Ltd 2007 (2) SA 406 (SCA); Den Braven SA (Pty) Ltd v Pillay and another 2008 (6) SA 229 (D); Experian South Africa (Pty) Ltd v Haynes and another 2013 (1) SA 135;

[10] (2013) 34 ILJ 529 (GSJ).

[11] (2009) 30 ILJ 1828 (LC).

[12] (2012) 33 ILJ 629 (LC).

[13] [1916] 1 AC 688 (HL) at 709.

[14] 1993 (1) SA 537 (A)

[15] Ibid fn 9.

[16] Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd [1984] ZASCA 51; 1984 (3) SA 623 (A) at 634H-635C, where it was held; ‘It is correct that, where in proceedings on notice of motion disputes of fact have arisen on the affidavits, a final order, whether it be an interdict or some other form of relief, may be granted if those facts averred in the applicant's affidavits which have been admitted by the respondent, together with the facts alleged by the respondent, justify such an order. The power of the Court to give such final relief on the papers before it is, however, not confined to such a situation. In certain instances the denial by respondent of a fact alleged by the applicant may not be such as to raise a real, genuine or bona fide dispute of fact . . . If in such a case the respondent has not availed himself of his right to apply for the deponents concerned to be called for cross-examination under Rule 6(5)(g) of the Uniform Rules of Court . . . and the Court is satisfied as to the inherent credibility of the applicant's factual averment, it may proceed on the basis of the correctness thereof and include this fact among those upon which it determines whether the applicant is entitled to the final relief which he seeks . . . Moreover, there may be exceptions to this general rule, as, for example, where the allegations or denials of the respondent are so far-fetched or clearly untenable that the Court is justified in rejecting them merely on the papers . . .’

[16] Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd [1984] ZASCA 51; 1984 (3) SA 623 (A) at 634H-635C, where it was held;

‘It is correct that, where in proceedings on notice of motion disputes of fact have arisen on the affidavits, a final order, whether it be an interdict or some other form of relief, may be granted if those facts averred in the applicant's affidavits which have been admitted by the respondent, together with the facts alleged by the respondent, justify such an order. The power of the Court to give such final relief on the papers before it is, however, not confined to such a situation. In certain instances the denial by respondent of a fact alleged by the applicant may not be such as to raise a real, genuine or bona fide dispute of fact . . . If in such a case the respondent has not availed himself of his right to apply for the deponents concerned to be called for cross-examination under Rule 6(5)(g) of the Uniform Rules of Court . . . and the Court is satisfied as to the inherent credibility of the applicant's factual averment, it may proceed on the basis of the correctness thereof and include this fact among those upon which it determines whether the applicant is entitled to the final relief which he seeks . . . Moreover, there may be exceptions to this general rule, as, for example, where the allegations or denials of the respondent are so far-fetched or clearly untenable that the Court is justified in rejecting them merely on the papers . . .’

[17] Setlogelo v Setlogelo 1914 AD 221 Minister of Health v Drums and Pails Reconditioning CC t/a Village Drums and Pails 1997 (3) SA867 (N) at 872 C.

[18] Act 75 of 1997, as amended.