Maize Master (Pty) Ltd v Lekhoana and Another (J1252/ 2023) [2023] ZALCJHB 299 (23 October 2023)

THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

Not Reportable

Case no: J 1252/ 2023

In the matter between:

MAIZE MASTER (PTY) LTD Applicant And MOLAPO SAMUEL LEKHOANA First Respondent ROFF (PTY) LTD Second Respondent

Heard: 18 October 2023

Delivered: 23 October 2023

This judgment was handed down electronically by consent of the parties’ legal representatives by circulation to them via email. The date for hand-down is deemed to be 23 October 2023.

JUDGMENT

PRINSLOO J

Introduction

[1] The Applicant trades as a manufacturer of maize milling machines and a supplier of rollers and consumables since 1988. It currently renders services to approximately 3 000 customers, with an annual turnover of more than R 36 million. Its principal place of business is Kroonstad.

[2] The First Respondent (Respondent) was employed by the Applicant as a general worker in 2013. He does not have any formal qualifications, with his highest level of education being Grade 11. The Respondent earned R 5 100 per month and resides in Kroonstad with his parents and one minor child, whom he supports financially.

[3] The Second Respondent (Roff) conducts business by manufacturing and supplying maize milling machines and rollers and has been conducting this business for more than 30 years. Its principal place of business is also in Kroonstad and it is common cause that the Applicant and Roff are competitors.

[4] On 1 March 2021, the Applicant and the Respondent signed a written agreement of employment, wherein the Respondent’s position is recorded as ‘algemene werker’ (general worker) and the said agreement contained a clause providing for ‘handelsbeperking’ (restraint of trade) and a clause providing for ‘geheimhouding’ (confidentiality).

[5] The restraint of trade clause provided that after termination of his employment, the Respondent was restrained for a period of two years from the date of termination of the agreement, and within a radius of 250km from the Applicant’s business, to take up employment or having an interest in any capacity in any entity which carries on or has an involvement in the same business as or a business similar to the Applicant’s business. The confidentiality clause provided that the Respondent would not disclose any confidential information regarding the Applicant’s “operasionele tegnieke en vaardighede, handelsgeheime, besigheidsverbintenisse and ander vertroulike inligting en prosesses met betrekking to die werkgewer se besigheid, sy kliënte of sy besigheidsmetodes.”

[6] The Respondent left the Applicant’s employ on 11 August 2023 and he took up employment with the Roff. On 25 August 2023, the Applicant’s attorney demanded that the Respondent resign from his position with Roff by no later than 28 August 2023 and that he provide an undertaking not to breach the restraint agreement for the remainder of the restraint period, failing which the Applicant would approach the court for relief.

[7] The Respondent did not accede to the Applicant’s demands, as per the letter of 25 August 2023 and an urgent application seeking to enforce the restraint of trade was filed with this Court on 18 September 2023 and enrolled for hearing on 18 October 2023.

The urgent application

[8] The Applicant approached the Court on an urgent basis to enforce the terms of the restraint of trade agreement, as contained in the Respondent’s written employment contract.

[9] The Applicant essentially seeks an order to interdict and restrain the Respondent from inter alia using, disclosing or divulging the trade secrets and confidential information of the Applicant and from being employed by or having an interest in any entity which carries on or has an involvement in the same business as or a business similar to the Applicant’s business until 11 August 2025.

[10] The Respondent opposed the application.

The applicable legal principles

[11] In Esquire System Technology (Pty) Ltd t/a Esquire Technologies v Cronjé and another[1] the position regarding 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…’

[12] 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.

[13] The 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.

[14] The party seeking to avoid the restraint, bears the onus to show that, on a balance of probabilities, the restraint agreement is unenforceable because it is unreasonable.[2]

[15] In Labournet (Pty) Ltd v Jankielsohn and Another[3] (Labournet), the Labour Appeal Court (LAC) considered the applicable legal principles and held that:

‘[40] In Reddy, the Supreme Court of Appeal preferred not to become embroiled in the issue of onus and adopted a pragmatic approach, which according to it, was consistent with an approach where there was a direct application of the Constitution to restraint agreements. This approach was specifically adopted in respect of motion proceedings for the enforcement of restraints where the issue for determination was the reasonableness of the restraint. In terms of that approach, where the facts,

concerning the reasonableness, had been canvassed in the affidavits – genuine disputes of fact are to be resolved in favour of the party sought to be restrained by applying the so-called Plascon-Evans rule. If the accepted facts show that the restraint is reasonable, then the applicant must succeed, but if they show that the restraint is unreasonable then the respondent in those proceedings must succeed.

…

[43] It is now clear from, inter alia, Basson and Reddy that the reasonableness and enforceability of a restraint depend on the nature of the activity sought to be restrained, the rationale (purpose) for the restraint, the duration of the restraint, the area of the restraint, as well as the parties’ respective bargaining positions. The reasonableness of the restraint is determined with reference to the circumstances at the time the restraint is sought to be enforced. With reference particularly to the facts of this matter, it is an established principle of law that the employee cannot be interdicted or restrained from taking away his or her experience, skills or knowledge, even if those were acquired as a result of the training which the employer provided to the employee.’

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

[17] The test set out in Basson v Chilwan and Others[4] (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?

[18] In Kwik Kopy (SA) (Pty) Ltd v van Haarlem and Another,[5] a further consideration was added namely whether the restraint goes further than is necessary to protect the interest.

[19] In Jonsson Workwear v Williamson and another[6] (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.’

[20] 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.[7]

[21] 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.[8]

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

[23] In Labournet, the LAC held that:

‘[41] 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.

[42] 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]

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

[25] The Applicant must 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

[26] It is common cause that the Respondent signed the agreement, containing the restraint of trade and confidentiality undertakings sought to be enforced by the Applicant.

[27] Although the Respondent alleged in his opposing affidavit that there is no valid restraint of trade agreement as the agreement is void for lack of intention, such position was not persisted with, and Mr Bhima for the Respondent indicated during argument that this was not an issue for the Court to decide. Mr Bhima submitted that the restraint should not be enforced because it is unreasonable and that is the real issue to be decided by this Court.

[28] The Applicant’s case is that the Respondent has confidential information in his possession which enables him to use, disclose, divulge or make known the Applicant’s trade secrets to Roff, a competitor of the Applicant. The Applicant seeks to interdict the Respondent from utilising its confidential information to conduct and advance competitive business.

The Respondent’s breach

[29] It is common cause that the Respondent took up employment with Roff, a competitor of the Applicant, which constitutes a breach of the agreement.

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

[31] As the Respondent challenges the reasonableness of the restraint, it is for him to show that the Applicant has no protectable proprietary interest.

Issues to be decided

[32] A restraint holder’s proprietary interests fall into two categories, namely confidential information (trade secrets) and relationships with customers, potential customers, suppliers and others (trade connections).

[33] In argument, Mr Goldberg for the Applicant confirmed that the interest the Applicant seeks to be protected is its trade secrets and that this application does not concern the protection of trade connections.

[34] The first question this Court must consider is whether the Applicant has a protectable interest in the form of trade secrets, which is threatened by the Respondent’s employment with Roff.

[35] Whether information constitutes a trade secret is a factual question.[9]

[36] The Applicant’s case is that it has a protectable interest in the form of confidential information and trade secrets, wherefore it has a clear right to enforce the restraint and confidentiality undertakings provided by the Respondent.

[37] The Respondent’s case on the other hand is that the Applicant does not have any proprietary interests worthy of protection. The onus is on the Respondent to prove the unreasonableness of the restraint[10] and he must establish that he had no access to confidential information.

Confidential information

[38] In Experian SA (Pty) Ltd v Haynes & another,[11] 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.’

[39] In Jonsson,[12] 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.’

[40] The Applicant’s case is that the most important part of a milling machine is the rollers. A specific groove pattern, unique to the Applicant, is machined into the roller. The ridges or grooves in the roller are called ‘flutes’. The said pattern determines the texture of the maize product. The Respondent, who was employed as a general worker, was responsible for cutting these patterns into the roller.

[41] In support of its case, the Applicant stated that to understand the process, the Respondent underwent intensive training during which the Applicant disclosed its trade secrets “or re-flute a roller with the applicant’s unique pattern without knowing the specific technique known only to the applicant and his trained technicians”.

[42] The Applicant’s case is further that the details of the “patterns and methods to machine these unique patterns on the rollers” constitute the protectable interest. The pattern information is confidential and constitutes trade secrets and confidential information which is not available to its competitors and which would place them at a considerable advantage if they were to gain access to

it.

[43] According to the Applicant, access to the aforesaid trade secrets and confidential information would be extremely useful to a competitor

and valuable in financial terms as it would provide a competitor with the information to supply and manufacture a machine producing the exact same texture of maize as the Applicant. Furthermore, it would enable the competitor to refurbish and service machines sold and manufactured by the Applicant. As a result, the Respondent is in a position to use or disclose the said trade secrets and confidential information to Roff, a competitor. This is denied by the Respondent. He stated that he has no specialized knowledge or information, nor has he imparted any information regarding the Applicant’s business to Roff. Roff has no interest in how the Applicant flutes a roller.

[44] The Respondent stated that he is not in possession of any confidential information or trade secrets that could be disclosed to Roff, to the detriment of the Applicant. His case is that this application is a vindictive attempt by the Applicant to cause him harm as there is no interest that requires protection through the enforcement of the restraint. The Applicant filed a replying affidavit and stated that the ‘specified manner’ and ‘adjustment’ referred to by the Respondent are confidential information and the specified groove can only be created by the correct machine settings. The settings consist of selecting the correct gear with the correct number of teeth to fit on the machine and that is used to create the texture of the flute or groove on the roller. These settings combined create the flute pattern designed by the Applicant since 1988 and are not in the public domain. The Respondent can recognize the flute pattern and will immediately know what gear and settings to use to re-flute the roller without having to machine the roller to a smooth service before fluting the roller with Roff’s pattern. Roff will be

able to manufacture milling machines fitted with rollers that have the exact same flute pattern as the Applicant.

[45] I already alluded to the fact that the Applicant has to show that it has an interest in its confidential information that is worthy of protection and that for information to be confidential, it must be capable of application in the trade or industry, 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. These requirements apply because not all information obtained by an employee during the course of his or her employment or which he or she had access to during the execution of duties, will be secret or confidential.

Is there a protectable interest?

[46] The question is whether a case was made out on the proper accepted facts as to whether the information the Respondent had access to whilst employed by the Applicant, would fall within the parameters of what could be classified as confidential information.

[47] The Applicant’s trade secret is “patterns and methods to machine these unique patterns on the rollers”. It is thus twofold: the unique pattern and the method to flute or re-flute a roller with the Applicant’s unique pattern, using a specific technique, known only to the Applicant and its ‘trained technicians’. In short, the Applicant’s case is that the pattern information is confidential and constitutes a trade secret.

[48] Before the issue of a protectable interest is decided, it is important to deal with the duties performed by the Respondent. The Applicant’s founding affidavit is scant on this aspect, but the case set out in the founding affidavit is that the pattern information constitutes a trade secret and the Respondent was responsible for cutting these patterns into the roller, he was extensively trained to flute a roller with the Applicant’s unique pattern, the Applicant expended money and time to train the Respondent and with this information in his possession, the Respondent is in a position to target the Applicant’s customers and to use or disclose the trade secrets to Roff.

[49] The Respondent’s version is that he learnt the job by watching and practising and that he, to a great extent, taught himself by observing Mr Fondini fluting and re-fluting. He denies that he was provided with any formal training or that money was spent to train him - he was only guided on how to flute and re-flute when he was taught by Mr Fondini, and that he mostly observed others, practised and in that way learnt how to do the job. The Applicant disputed this in reply and stated that the Respondent worked as Mr Fondini’s assistant for 12 months before he was entrusted to flute and re-flute rollers. The Respondent’s version is that he did not undergo extensive training to learn how to flute or re-flute a roller.

[50] The Respondent stated that he was employed by the Applicant as a general worker to flute and re-flute rollers and he is employed in the same position by Roff – he flutes and re-flutes rollers for Roff, on instruction. He submitted that all he knows to do is to flute and re-flute a roller and to do shaft repairs and he works according to the specifications and instructions given

to him.

[51] In Aranda Textile Mills (Pty) Ltd v L D Hurn[13] the Court held as follows:

‘A man’s skills and abilities are a part of himself and he cannot ordinarily be precluded from making use of them by a contract in restraint of trade. An employer who has been to the trouble and expense of training a workman in an established field of work, and who has thereby provided the workman with knowledge and skills in the public domain, which the workman might not otherwise have gained, has an obvious interest in retaining the services of the workman. In the eye of the law, however, such an interest is not in the nature of property in the hands of the employer. It affords the employer no proprietary interest in the workman, his know-how or skills. Such know-how and skills in the public domain become attributes of the workman himself, do not belong in any way to the employer and the use thereof cannot be subjected to restriction by way of a restraint of trade provision. Such a restriction, impinging as it would on the workman’s ability to compete freely and fairly in the market place, is unreasonable and contrary to public policy…’

[52] In Labournet,[14] the LAC also held that:

‘Even though it is acknowledged that it is difficult to distinguish between the employee’s use of his or her own knowledge, skill and experience, and the use of his or her employer’s trade secrets, it is accepted that an employee cannot be prevented from using what is in his, or her, head.’

[53] Thus the mere fact that the Respondent has taken up employment with Roff, where he flutes and re-flutes rollers, does not in itself entitle the Applicant to any relief if all he will be doing is applying his skills to flute a roller, even if those were acquired whilst in the employ of the Applicant. It is only if the restriction on his activities serves to protect a proprietary interest of the Applicant that the Respondent would be in breach of his contractual obligations.

[54] The Applicant submitted that the process of manufacturing the Applicant’s rollers and flute pattern depends on the steps in setting the machine to the specific pattern and not on the skills of the Respondent.

[55] Mr Lues, a senior manager in Roff’s employ, deposed to an affidavit in support of the Respondent’s opposition to this application. Mr Lues explained that the Respondent is one of many of Roff’s employees who is tasked with fluting and re-fluting and the sharpening of rollers. He has no specialized knowledge and he simply knows how to operate machinery in order to obtain a certain grade or specification of fluting on a roller. The Respondent has no knowledge of the composition of Roff’s roller

or how the fluting of the roller has been designed. He works according to instructions.

[56] The Respondent denies that he is in possession of any confidential information of the Applicant, that he has any knowledge of the Applicant’s business or that he ever held a position of trust. He submitted that all he knows to do is to flute and re-flute a roller, which is what he does at Roff, according to Roff’s own instructions.

[57] This goes to the question as to whether the Applicant’s pattern information is confidential and constitutes a trade secret, which justifies protection.

[58] It may be so that the Respondent, whilst employed by the Applicant, used the Applicant’s specific technique to flute a roller with the Applicant’s unique pattern, but that does not per se render the pattern or the method a trade secret. More is required.

[59] In Mozart Ice Cream Franchises (Pty) Ltd v Davidoff and Another,[15] it was held that:

‘It is clear, however, given the nature of the Plascon-Evans rule, that the mere ipse dixit of the applicant cannot suffice on its own to establish these proprietary interests. As Olivier AJ noted in Viamedia (Pty) Ltd v Sessa (unreported, CPD case No 8679/2008):

“Information does not become confidential and a process or practice does not become secret merely because Viamedia contends that they do - or, perhaps, even if Mr Sessa subjectively believed them to be so. It does not suffice for Viamedia to say that it has confidential information or trade secrets. It must set out what they are and when and how Mr Sessa was exposed to them. It must set up the facts from which the conclusion could be drawn that something is indeed confidential or secret.”’

[60] In Automotive Tooling Systems (Pty) Ltd v Wilkens and others,[16] the Supreme Court of Appeal held that:

‘There are, I think, a number of difficulties that confront the appellant. First, the mere assertion by the appellant that the processes and methodologies in the design, manufacture and commissioning of customised marking machines are confidential does not make it so. The appellant does not identify any part of the process or method which is unique nor point to any other reason why such process or method is deserving of protection. There is no indication on the papers that the first and second respondents were placed in possession of any formulae, or designs or special methods of manufacturing relating to the processes and methodologies which, if done on a confidential basis, would have amounted to an interest worthy of protection.’

[61] The interest sought to be protected in this case, is the pattern information, which according to the Applicant is confidential and constitutes a trade secret, which is not available to its competitors and which would place them at a considerable advantage if they were to gain access to it.

[62] Considering the applicable authorities, it is incumbent upon the Applicant to identify why the pattern information is regarded as confidential and a trade secret, how it was developed and how the Respondent was placed in possession of the specific pattern information the Applicant seeks to protect. It is not sufficient to state that the pattern is confidential and a trade secret.

[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] The Respondent’s version is that no trade secrets were ever disclosed to him, he was merely told how to flute a roller in a specified manner and he would adjust the machine to flute the roller as required. His case is that he has no knowledge of the pattern information or information unique to the Applicant. He was told by the Applicant to flute a roller in a specified groove and he knew how to do that. He has no specialized knowledge. In its replying affidavit, the Applicant did no more than to put up a bare denial to this version of the Respondent.

[65] In reply, the Applicant attempted to make out a case that it was during the period of the Respondent’s extensive training that the confidential settings and method of setting the flute machine to create the flute pattern, was disclosed to him. The Respondent’s version is that he did not undergo extensive training to learn how to flute or re-flute a roller and that no confidential information was disclosed to him.

[66] In David Crouch Marketing CC v du Plessis,[17] 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.’[18]

[67] Mr Lues explained that Roff conducts business by manufacturing and supplying maize milling machines and rollers and has been conducting this business for more than 30 years. He explained that the specifications relating to the material composition of the roller and the fluting pattern, which the Applicant considers to be confidential, are not truly a secret as a competitor can discern such information through inspection and testing of a roller.

[68] Mr Lues explained that the Applicant and Roff each have their own specifications regarding the composition of the roller and the fluting of the roller and that Roff has no interest in the Applicant’s composition of the roller or its fluting pattern. In any event, if Roff wanted to utilize the composition of the Applicant’s roller and fluting patterns, it could simply purchase rollers from the Applicant and thereafter subject them to tests and inspections to ascertain the composition and patterns. Roff has no interest in ascertaining or using the composition and patterns of the Applicant’s rollers.

[69] Furthermore, there are many entities in South Africa with their core business the fluting and re-fluting of rollers and they flute and re-flute all types of roller sizes, according to the client’s specifications. As such, there is nothing truly secret about the composition of rollers and their patterns. Roff submitted that even if there was something secret about it, Roff would not need the Respondent to establish that.

[70] The Applicant’s flute pattern and methods are not trade secrets merely because of the Applicant’s say-so.

[71] The Applicant did not provide convincing evidence to show that the pattern it seeks to protect is unique and that the methods used were secret, to the extent that it was not in the public domain and that it would be of value to a competitor. In fact, Mr Lues indicated that the pattern could be discerned through inspection and testing, that there are many other companies that flute and re-flute all types of roller sizes to their client’s specifications and that Roff, as a competitor, has no interest in the

Applicant’s fluting pattern. If Roff wanted to ascertain the pattern of the Applicant’s rollers, it could do so by

subjecting them to tests and inspections, and not because of the Respondent. However, Roff has no interest in ascertaining or using

the patterns of the Applicant’s rollers, as it uses its own specifications and fluting of the rollers. This was not disputed in the Applicant’s replying affidavit.

[72] The proper approach to determining the facts was authoritatively set out in Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd[19]. 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 alleged by the respondent in its answering affidavit, read with the facts it has admitted to, justify the order prayed for.

[73] This application is to be decided by applying the Plascon-Evans rule. Considering the facts placed before this Court and applying the Plascon-Evans rule, the Applicant has not made out a case in respect of the confidential information it seeks to protect.

Conclusion

[74] The Applicant’s case in short is that the restraint agreement is breached by the fact that the Respondent took up employment with Roff, which is prohibited in terms of the restraint agreement, as Roff is a direct competitor of the Applicant. It appears that the Applicant is of the view that the mere fact that the Respondent was employed by the Applicant as a general worker, fluting and re-fluting rollers and that he is now employed in a similar capacity by a competitor, would suffice for the relief sought to be granted.

[75] I accept that as Roff is a direct competitor of the Applicant, the Respondent’s employment with Roff would prima facie be a breach of the restraint of trade agreement and would infringe the Applicant’s protectable interest. However, it is always

subject to the determination of the existence of a protectable interest and an actual infringement, based on the facts.

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

[77] Considering all the facts placed before me and applying the Plascon-Evans test, the answer is no.

[78] 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.

[79] An application 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.[20]

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

Costs

[81] The Applicant elected to invoke this Court’s jurisdiction under section 77(3) of the Basic Conditions of Employment Act[21], 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.

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

[83] In the premises, I make the following order:

Order

1. The application is dismissed with costs.

Connie Prinsloo

Judge of the Labour Court of South Africa

Appearances:

For the Applicant:

Mr A Goldberg from Goldberg Attorneys

For the First Respondent:

Advocate R Bhima

Instructed by:

Pagel Schulenburg Inc Attorneys

[1] [2010] ZALC 198; (2011) 32 ILJ 601 (LC) at para 36.

[2] Basson v Chilwan and Others [1993] ZASCA 61; 1993 (3) SA 742 (A) (Basson) at 7761I-J; Magna Alloys and Research (SA) (Pty) Ltd v Ellis [1984] ZASCA 116; 1984 (4) SA 874 (A) at paras 10 to 14; Reddy v Siemens Telecommunications (Pty) Ltd [2006] ZASCA 135; 2007 (2) SA 486 (SCA); Den Braven SA (Pty) Ltd v Pillay and another [2008] ZAKZHC 22; 2008 (6) SA 229 (D); Experian South Africa (Pty) Ltd v Haynes and another [2012] ZAGPJHC 105; 2013 (1) SA 135 (GSJ) (Experian).

[3] [2017] ZALAC 7; (2017) 38 ILJ 1302 (LAC).

[4] Basson supra at 767 C-H.

[5] 1999 (1) SA 472 (W) at 484E.

[6] (2014) 35 ILJ 712 (LC) at para 44.

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

[8] 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 All SA 321 (W) (Mossgas) at 333F, Walter McNaughten (Pty) Ltd v Schwartz 2004 (3) SA 381 (C) (Walter McNaughten) at 389.

[9] See Mossgas supra at 333, Walter McNaughten supra.

[10] Magna Alloys, supra; Basson supra; Reddy supra.

[11] Experian supra at para 19.

[12] Jonsson supra at para 49.

[13] [2000] 4 All SA 183 (E) at para 33.

[14] Labournet supra at para 44.

[15] [2008] ZAWCHC 118; 2009 (3) SA 78 (C) at 87A-C.

[16] 2007 (2) SA 271 (SCA) at para 15.

[17] [2009] ZALC 63; (2009) 30 ILJ 1828 (LC).

[18] Ibid at para 31.

[19] 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…’

[19] 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…’

[20] Setlogelo v Setlogelo 1914 AD 221; Minister of Health v Drums and Pails Reconditioning CC t/a Village Drums and Pails 1997 (3) SA 867 (N) at 872C.

[21] Act 75 of 1997, as amended.