Pepkor Speciality (Proprietary) Limited and Another v Van Huyssteen and Others (16806/2018) [2018] ZAWCHC 157 (7 November 2018)

Pepkor Speciality (Proprietary) Limited and Another v Van Huyssteen and Others (16806/2018) [2018] ZAWCHC 157 (7 November 2018)

The court found that the restraint of trade agreements entered into by the respondents with Tekkie Town survived the transfer of business to the applicants under section 197 of the Labour Relations Act, as the goodwill of Tekkie Town formed part of the transfer. The respondents, having admitted to operating a similar business and employing ex-Tekkie Town staff, were found to be in breach of the restraint agreements. While the original restraint was unreasonably wide, the court held that it could be modified to protect the applicants' legitimate interests without unduly restricting the respondents' economic activity. The requirements for interim interdictory relief were satisfied: the...

Citation
[2018] ZAWCHC 157
Parties
Applicant: Pepkor Speciality (Proprietary) Limited; Applicant: Pepkor Holdings Limited; Respondent: Abraham Johannes Van Huyssteen; Respondent: Bernard Eugene Mostert; Respondent: Michael Brown; Respondent: Gert Christoffel Claassens; Respondent: David Van Niekerk; Respondent: AJVN Holdings (Pty) Limited
Court
Western Cape High Court, Cape Town
Jurisdiction
South Africa
Judgment Date
7 November 2018
Case Number
16806/2018
Procedural Posture
Urgent Application / Interim Interdict Pending Trial
Outcome
Interim interdict granted in modified form; costs awarded as specified.
Judges
Baartman
Legal Topics
Restraint of Trade, Transfer of Business, Goodwill Protection, Interim Interdict, Employment Contracts
Labour Law Commercial and Corporate Restraint of Trade Transfer of Business Goodwill Protection Interim Interdict Employment Contracts

Case Brief

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Parties

Pepkor Speciality (Proprietary) Limited

Applicant

Pepkor Holdings Limited

Applicant

Abraham Johannes Van Huyssteen

Respondent

Bernard Eugene Mostert

Respondent

Michael Brown

Respondent

Gert Christoffel Claassens

Respondent

David Van Niekerk

Respondent

AJVN Holdings (Pty) Limited

Respondent

Procedural Posture

Urgent Application / Interim Interdict Pending Trial

Legal Issues

  1. 1 Whether the restraint of trade agreements survived the transfer of business and are enforceable by the applicants.
  2. 2 Whether the respondents' conduct constitutes a breach of the restraint of trade agreements.
  3. 3 Whether the restraint is unreasonably wide and should be modified by the court.

Ratio Decidendi

The court found that the restraint of trade agreements entered into by the respondents with Tekkie Town survived the transfer of business to the applicants under section 197 of the Labour Relations Act, as the goodwill of Tekkie Town formed part of the transfer. The respondents, having admitted to operating a similar business and employing ex-Tekkie Town staff, were found to be in breach of the restraint agreements. While the original restraint was unreasonably wide, the court held that it could be modified to protect the applicants' legitimate interests without unduly restricting the respondents' economic activity. The requirements for interim interdictory relief were satisfied: the...

Court Disposition

Interim interdict granted in modified form; costs awarded as specified.

Orders

  • Non-compliance with the Rules relating to form and service is condoned; the application is heard as one of urgency.
  • The trial of the action shall be heard as an expedient trial on dates to be agreed between the parties in consultation with the Judge President.