Maclear Financial Services (Pty) Ltd v Human (468/08) [2008] ZAECHC 43 (20 March 2008)

Maclear Financial Services (Pty) Ltd v Human (468/08) [2008] ZAECHC 43 (20 March 2008)

The court found that the restraint of trade clause was entered into freely and primarily to protect the applicant's proprietary interests, including its client base and goodwill, following the purchase of the respondent's business. The respondent's arguments regarding unequal bargaining power and lack of intention to re-enter the industry were rejected as disingenuous, given the circumstances and the agreed purchase price. The restraint was not found to be unreasonable or contrary to public policy, as the respondent was permitted to operate within the Humansdorp area and had the option to seek relaxation of the restraint's terms. The respondent's breach of the restraint was unjustified,...

Citation
[2008] ZAECHC 43
Parties
Applicant: Maclear Financial Services (Pty) Ltd; Respondent: Nicolaas Johannes Human
Court
High Courts - Eastern Cape
Jurisdiction
South Africa
Judgment Date
20 March 2008
Case Number
468/08
Procedural Posture
Urgent Application / Application for Permanent Interdict Enforcing Restraint of Trade
Outcome
Application granted. Permanent interdict enforcing restraint of trade issued against respondent.
Judges
D Chetty
Legal Topics
Restraint of Trade, Enforceability of Contracts, Proprietary Interest, Public Policy, Contractual Freedom
Commercial and Corporate Restraint of Trade Enforceability of Contracts Proprietary Interest Public Policy Contractual Freedom

Case Brief

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Parties

Maclear Financial Services (Pty) Ltd

Applicant

Nicolaas Johannes Human

Respondent

Procedural Posture

Urgent Application / Application for Permanent Interdict Enforcing Restraint of Trade

Legal Issues

  1. 1 Whether the restraint of trade covenant in the sale agreement is enforceable against the respondent.
  2. 2 Whether the restraint is unreasonable or contrary to public policy.
  3. 3 Whether the applicant has a proprietary interest deserving protection.

Ratio Decidendi

The court found that the restraint of trade clause was entered into freely and primarily to protect the applicant's proprietary interests, including its client base and goodwill, following the purchase of the respondent's business. The respondent's arguments regarding unequal bargaining power and lack of intention to re-enter the industry were rejected as disingenuous, given the circumstances and the agreed purchase price. The restraint was not found to be unreasonable or contrary to public policy, as the respondent was permitted to operate within the Humansdorp area and had the option to seek relaxation of the restraint's terms. The respondent's breach of the restraint was unjustified,...

Court Disposition

Application granted. Permanent interdict enforcing restraint of trade issued against respondent.

Orders

  • The respondent is prohibited until 7 October 2010 from being interested or engaged, whether as proprietor, partner, director, shareholder, employee, member of a syndicate or otherwise, in any business conducted in competition to Medcon within a radius of 150 kilometres from the Avenues Shopping Centre, Walmer, Port...
  • The respondent is to pay the costs of this application.