New Reclamation Group (Pty) Ltd v Davies and Another (17200/2013) [2014] ZAGPJHC 63 (20 March 2014)

New Reclamation Group (Pty) Ltd v Davies and Another (17200/2013) [2014] ZAGPJHC 63 (20 March 2014)

The court found that the applicant failed to establish any protectable interest in the form of trade secrets or customer connections. The evidence showed that pricing information in the scrap metal industry is transient and quickly becomes public, and customer relationships are not exclusive or sufficiently strong to warrant protection. The employment of former applicant employees by the respondent was lawful and did not amount to unlawful competition. The restraint of trade agreement was held to be unreasonable and contrary to public policy, as it would unjustifiably restrict the respondent's right to choose his trade or profession. Accordingly, the application to enforce the restraint...

Citation
[2014] ZAGPJHC 63
Parties
Applicant: The New Reclamation Group (Pty) Ltd; Respondent: Neil Davies; Respondent: West Rand Scrap (Pty) Ltd
Court
South Gauteng High Court, Johannesburg
Jurisdiction
South Africa
Judgment Date
20 March 2014
Case Number
17200/2013
Procedural Posture
Urgent Application / Final Relief Application to Enforce Restraint of Trade Agreement
Outcome
Application dismissed with costs, including costs of two counsel.
Judges
M Tsoka
Legal Topics
Restraint of Trade, Protectable Interest, Public Policy, Customer Connections, Trade Secrets
Commercial and Corporate Civil Procedure Restraint of Trade Protectable Interest Public Policy Customer Connections Trade Secrets

Case Brief

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Parties

The New Reclamation Group (Pty) Ltd

Applicant

Neil Davies

Respondent

West Rand Scrap (Pty) Ltd

Respondent

Procedural Posture

Urgent Application / Final Relief Application to Enforce Restraint of Trade Agreement

Legal Issues

  1. 1 Whether the applicant has a protectable interest worthy of protection under the restraint of trade agreement.
  2. 2 Whether it is reasonable to enforce the restraint of trade agreement against the respondent, considering public policy and constitutional rights.

Ratio Decidendi

The court found that the applicant failed to establish any protectable interest in the form of trade secrets or customer connections. The evidence showed that pricing information in the scrap metal industry is transient and quickly becomes public, and customer relationships are not exclusive or sufficiently strong to warrant protection. The employment of former applicant employees by the respondent was lawful and did not amount to unlawful competition. The restraint of trade agreement was held to be unreasonable and contrary to public policy, as it would unjustifiably restrict the respondent's right to choose his trade or profession. Accordingly, the application to enforce the restraint...

Court Disposition

Application dismissed with costs, including costs of two counsel.

Orders

  • The application is dismissed.
  • The applicant is ordered to pay the costs of the application, including the costs occasioned by the employment of two counsel.