One Capital Sponsor Services (Pty) Ltd and Another v Chellan and Others (J1572/17) [2017] ZALCJHB 340 (18 September 2017)

One Capital Sponsor Services (Pty) Ltd and Another v Chellan and Others (J1572/17) [2017] ZALCJHB 340 (18 September 2017)

The court found that the restraint of trade and confidentiality agreement entered into between One Capital and Mr Chellan was valid and enforceable. The applicants established that Mr Chellan had access to confidential information and developed significant customer connections during his employment, both of which are protectable interests. Mr Chellan breached the restraint by joining UBS, a direct competitor, within the restraint period. His contentions regarding duress, lack of access to confidential information, and limited client contact were rejected on the evidence, including unanswered affidavits and corroborating documents. The urgency of the application was not self-created, as...

Citation
[2017] ZALCJHB 340
Parties
Applicant: One Capital Sponsor Services (Pty) Ltd; Applicant: One Capital Advisory (Pty) Ltd; Respondent: Calvin Chellan; Respondent: UBS South Africa (Pty) Ltd; Respondent: UBS South Africa Holdings (Pty) Ltd; Respondent: UBS Corporate Finance South Africa (Pty) Ltd; Respondent: UBS Switzerland AG
Court
Labour Court Johannesburg
Jurisdiction
South Africa
Judgment Date
18 September 2017
Case Number
J1572/17
Procedural Posture
Urgent Application / Final Determination of Urgent Application for Enforcement of Restraint of Trade and Confidentiality Agreement
Outcome
Application granted. The restraint of trade and confidentiality agreement is enforced against Mr Chellan.
Judges
Myburgh, AJ
Legal Topics
Restraint of Trade, Confidential Information, Enforceability of Contracts, Customer Connections, Reasonableness of Restraint, Stipulatio Alteri
Labour Law Commercial and Corporate Restraint of Trade Confidential Information Enforceability of Contracts Customer Connections Reasonableness of Restraint Stipulatio Alteri

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Parties

One Capital Sponsor Services (Pty) Ltd

Applicant

One Capital Advisory (Pty) Ltd

Applicant

Calvin Chellan

Respondent

UBS South Africa (Pty) Ltd

Respondent

UBS South Africa Holdings (Pty) Ltd

Respondent

UBS Corporate Finance South Africa (Pty) Ltd

Respondent

UBS Switzerland AG

Respondent

Procedural Posture

Urgent Application / Final Determination of Urgent Application for Enforcement of Restraint of Trade and Confidentiality Agreement

Legal Issues

  1. 1 Whether the restraint of trade and confidentiality agreement entered into between One Capital and Mr Chellan is enforceable.
  2. 2 Whether Mr Chellan breached the restraint by taking up employment with a competitor.
  3. 3 Whether the restraint is unreasonable and contrary to public policy.

Ratio Decidendi

The court found that the restraint of trade and confidentiality agreement entered into between One Capital and Mr Chellan was valid and enforceable. The applicants established that Mr Chellan had access to confidential information and developed significant customer connections during his employment, both of which are protectable interests. Mr Chellan breached the restraint by joining UBS, a direct competitor, within the restraint period. His contentions regarding duress, lack of access to confidential information, and limited client contact were rejected on the evidence, including unanswered affidavits and corroborating documents. The urgency of the application was not self-created, as...

Court Disposition

Application granted. The restraint of trade and confidentiality agreement is enforced against Mr Chellan.

Orders

  • The first respondent is interdicted and restrained until 31 January 2018, in each province of South Africa, from directly or indirectly being associated with, concerned with, interested in, or engaged in the business of the second to fifth respondents or any competitor of the applicants in the provision of JSE...
  • The first respondent is interdicted and restrained until 31 July 2018, in each province of South Africa, from communicating with, soliciting, interfering with, or enticing away any business client or supplier of the applicants, and from soliciting orders, canvassing business, selling or supplying products, rendering...