NRG Office Solutions (Pty) Ltd v Johnson and Another (EL: 1129/14, ECD: 2429/14) [2014] ZAECELLC 11 (30 September 2014)

NRG Office Solutions (Pty) Ltd v Johnson and Another (EL: 1129/14, ECD: 2429/14) [2014] ZAECELLC 11 (30 September 2014)

The court found that the applicant established a protectable commercial interest in its customer base and confidential information, which the first respondent threatened by soliciting customers and taking up employment with a competitor. The respondent’s attempts to circumvent the restraint by employment with a related company were rejected as contrived. The restraint period of two years and its geographical scope were held to be reasonable, given the nature of the applicant’s business and the respondent’s role. However, the ten-year prohibition on disclosure of confidential information was found to be excessive and unreasonable. The respondent’s personal circumstances and allegations of...

Citation
[2014] ZAECELLC 11
Parties
Applicant: NRG Office Solutions (Proprietary) Ltd; Respondent: Juliet Johnson (nee Gower); Respondent: Fusion Office Automation
Court
Eastern Cape High Court, East London Local Court
Jurisdiction
South Africa
Judgment Date
30 September 2014
Case Number
EL: 1129/14, ECD: 2429/14
Procedural Posture
Urgent Application / Confirmation of Rule Nisi and Interim Interdict
Outcome
Application granted. Rule nisi confirmed with costs. Application to strike out dismissed with costs. Paragraph 2.1.4 of the rule amended to limit restraint on disclosure of confidential information to two years.
Judges
J.E Smith
Legal Topics
Restraint of Trade, Enforceability of Contracts, Confidential Information, Interim Interdict, Liquidated Damages
Commercial and Corporate Civil Procedure Restraint of Trade Enforceability of Contracts Confidential Information Interim Interdict Liquidated Damages

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Parties

NRG Office Solutions (Proprietary) Ltd

Applicant

Juliet Johnson (nee Gower)

Respondent

Fusion Office Automation

Respondent

Procedural Posture

Urgent Application / Confirmation of Rule Nisi and Interim Interdict

Legal Issues

  1. 1 Whether the restraint of trade agreement is valid and enforceable against the first respondent.
  2. 2 Whether the restraint period and geographical scope are reasonable and not contrary to public policy.
  3. 3 Whether the applicant has a protectable commercial interest justifying enforcement of the restraint.

Ratio Decidendi

The court found that the applicant established a protectable commercial interest in its customer base and confidential information, which the first respondent threatened by soliciting customers and taking up employment with a competitor. The respondent’s attempts to circumvent the restraint by employment with a related company were rejected as contrived. The restraint period of two years and its geographical scope were held to be reasonable, given the nature of the applicant’s business and the respondent’s role. However, the ten-year prohibition on disclosure of confidential information was found to be excessive and unreasonable. The respondent’s personal circumstances and allegations of...

Court Disposition

Application granted. Rule nisi confirmed with costs. Application to strike out dismissed with costs. Paragraph 2.1.4 of the rule amended to limit restraint on disclosure of confidential information to two years.

Orders

  • The application to strike out is dismissed with costs.
  • The rule nisi is confirmed with costs, save that paragraph 2.1.4 thereof is amended to read: 'Disclosing the trade secrets and confidential information of the applicant, and from directly or indirectly using, disclosing, divulging or making known such trade secrets or confidential information.'