Reeves and Another v Marfield Insurance Brokers (Pty) Ltd and Another (12/95) [1996] ZASCA 39; 1996 (3) SA 766 (SCA); (28 March 1996)

Reeves and Another v Marfield Insurance Brokers (Pty) Ltd and Another (12/95) [1996] ZASCA 39; 1996 (3) SA 766 (SCA); (28 March 1996)

The court held that the restraint of trade clause, which applied upon cessation of employment 'for any reason whatsoever', was enforceable even after wrongful termination by the employer, provided there was no fraud or wilful wrongdoing. The phrase was unambiguous and intended to operate regardless of the manner of termination. The court rejected the English law rule that wrongful dismissal precludes enforcement of a restraint, finding no basis for its application in South African law where the parties have expressly agreed otherwise. The circumstances of Reeves's departure did not amount to wilful wrongdoing or bad faith by the employer, and the enforcement of the restraint was not...

Citation
[1996] ZASCA 39
Parties
Appellant: Reeves Insurance Brokers CC; Appellant: Reeves; Respondent: Marfield Insurance Brokers (Pty) Ltd; Respondent: Glenvaal Dewar Rand Ltd (GDR)
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
28 March 1996
Case Number
12/95
Procedural Posture
Civil Appeal / Appeal From Eastern Cape Division; Cross Appeal on Area of Restraint
Outcome
Appeal and cross-appeal dismissed with costs, including costs of two counsel on each side.
Judges
Scott, Corbett, Hefer, Nienaber, Schutz
Legal Topics
Restraint of Trade, Wrongful Dismissal, Enforceability of Contractual Terms, Public Policy, Area of Restraint
Commercial and Corporate Labour Law Restraint of Trade Wrongful Dismissal Enforceability of Contractual Terms Public Policy Area of Restraint

Case Brief

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Parties

Reeves Insurance Brokers CC

Appellant

Reeves

Appellant

Marfield Insurance Brokers (Pty) Ltd

Respondent

Glenvaal Dewar Rand Ltd (GDR)

Respondent

Procedural Posture

Civil Appeal / Appeal From Eastern Cape Division; Cross Appeal on Area of Restraint

Legal Issues

  1. 1 Whether a restraint of trade clause applies following wrongful termination of employment by the employer.
  2. 2 Whether the enforcement of the restraint is contrary to public policy in the circumstances.
  3. 3 Whether the area specified in the restraint clause is reasonable and enforceable.

Ratio Decidendi

The court held that the restraint of trade clause, which applied upon cessation of employment 'for any reason whatsoever', was enforceable even after wrongful termination by the employer, provided there was no fraud or wilful wrongdoing. The phrase was unambiguous and intended to operate regardless of the manner of termination. The court rejected the English law rule that wrongful dismissal precludes enforcement of a restraint, finding no basis for its application in South African law where the parties have expressly agreed otherwise. The circumstances of Reeves's departure did not amount to wilful wrongdoing or bad faith by the employer, and the enforcement of the restraint was not...

Court Disposition

Appeal and cross-appeal dismissed with costs, including costs of two counsel on each side.

Orders

  • The appeal is dismissed with costs, including costs of two counsel.
  • The cross-appeal is dismissed with costs, including costs of two counsel.