Savvy Insurance Brokers (PTY) Ltd v Fourie and Another (J 722/2022) [2022] ZALCJHB 222 (8 August 2022)

THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

Not Reportable

Case number: J 722/2022

In the matter between:

SAVVY INSURANCE BROKERS (PTY) LTD

Applicant

and

CHERYLISE CLACK FOURIE

First Respondent

B-SURE AFRICA INSURANCE BROKERS (PTY) LTD

Second Respondent

Heard: 28 July 2022

Delivered: 8 August 2022

This judgment was handed down electronically by circulation to the parties' legal representatives by email, publication on the Labour

Court’s website and released to SAFLII. The date for hand-down is deemed to be 08 August 2022.)

JUDGMENT

PRINSLOO, J

Introduction

[1] The Applicant filed an urgent application seeking to interdict and restrain the First Respondent (Respondent) from inter alia divulging or sharing confidential information with the Second Respondent (B-Sure) or any other party competing with the business of the Applicant and from being employed by the B-Sure or any other entity engaged in any activity relating to brokering or selling short-term insurance products. I will fully deal with the relief sought infra.

[2] The Respondents opposed the application.

[3] The Respondent left the Applicant’s employ at the end of April 2022 and on 11 May 2022 the Applicant’s attorneys demanded that the Respondent’s service with Be-Sure be terminated, failing which they would proceed with an urgent application. The urgent application seeking to enforce a restraint of trade was filed on 16 June 2022 and enrolled for hearing on 28 July 2022.

[4] The Respondent took issue with urgency and submitted that the matter is not urgent, given the delay in launching this application.

[5] The attack on urgency is not entirely without merit. However, I am inclined to deal with the merits of the matter. The resources of this Court are notoriously scarce and a matter such as this one, should rather be dealt with and not burden another Court in future.

[6] Before I deal with the merits of this case, I wish to express the Court’s displeasure with the papers filed by the parties. The parties lost sight of the issue this Court, sitting as an urgent Court, must decide and they placed evidence and averments before this Court that were neither necessary nor relevant to decide the issue, namely whether the restraint of trade agreement should be enforced and if so, to what extent.

[7] Both parties made averments that were personal, emotional and vindictive, which averments find no place in an application such as this one. It is astonishing that both parties were legally represented. The said averments should not have made their way into the papers filed and the legal representatives should have advised so, as this is a Court of law and not a playground where parties can employ emotional and vindictive tricks to get the desired result. The papers placed before me made this Court’s task not

an easy one as the real issue was clouded by issues that should not receive any attention from this Court.

Material facts:

[8] The Applicant’s business is to provide financial products to consumers, as contemplated by the Financial Advisory and Intermediary

Services Act[1] (FSCA). The Applicant focuses primarily on motor vehicle insurance. Through its employees, the Applicant brokers the sale of short-term insurance to clients that are referred to the Applicant by motor dealerships.

[9] Many dealerships employ ‘finance and insurance managers’ (F&I) who assist clients in financing motor vehicles and to deal with insurance-related products when vehicles are purchased.

[10] The Applicant operates as a call centre, where referred clients are offered a ‘basket’ of competitive insurance products, with different premiums, and the client elects the product. The Applicant effectively operates as a middleman when clients purchase a motor vehicle from dealers nationwide, with the dealers referring the client to the Applicant and its employees, acting as agents, sell insurance policies to the clients. The Applicant gains financially by receiving a commission from the insurer.

[11] The Applicant’s case is that its business depends on the sale of motor vehicles, for which insurance products are sold, and the relationship that is built up with the dealerships.

[12] The Respondent was employed by the Applicant on 13 July 2020 as a dealer sales consultant, reporting to a key manager. The parties concluded a written employment contract wherein the duties and obligations of the Respondent, as a dealer sales consultant were recorded. The Applicant placed specific reliance on one of the key duties, as contained in the contract to wit: “maintain, grow and expand relationships with existing policyholders and also with the referring agents (dealers and dealerships), last of whom it may be expected from time to time to interact on a social level such as informal functions or on-site visits.”

[13] The Applicant’s pleaded case is that the Respondent worked under the executive sales manager, Mr Lorenzo Gardener (Mr Gardener) and as such she had access to sensitive information that is both confidential and proprietary to the Applicant.

[14] The Respondent left the Applicant’s employ at the end of April 2022.

[15] It is common cause that the Respondent took up employment with B-Sure, a competitor of the Applicant.

The urgent application

[16] The Applicant approached the Court on an urgent basis to enforce the terms of the restraint of trade agreement, as contained in the Respondent’s written employment contract.

[17] In the notice of motion, the Applicant seeks an order to interdict and restrain the Respondent from:

‘1. Interdicting, enjoining and restraining the first respondent from sharing or making available any confidential information to the second respondent or any other party competing with the business of the applicant.

2. Interdicting, enjoining and restraining the first respondent, at any time prior to 26 April 2024 and within the Republic of South Africa, whether directly or indirectly, in any capacity whatsoever, from carrying on, being interested or engaged in, or concerned with, or employed by-

2.1. the business of the second respondent, or

2.2. any company, close corporation, firm, undertaking or concern that conducts a business that competes with the business of the applicant, or is engaged in any activity relating to brokering or selling short-term insurance products.

3 Interdicting, enjoining, and restraining the first respondent, from contacting or from soliciting referrals from any motor dealerships, finance and insurance managers or any other persons with whom the applicant has established relationships and has done business through all with your aforesaid persons and entities.

4. Interdicting the second respondent from employing the first respondent before 28 April 2024.

5. The respondents shall, jointly and severally, be liable for the costs of this application on a scale between attorney and client.’

[18] The Applicant has approached this Court for relief on the following grounds: the Respondent is in breach of the agreement by taking up employment with B-Sure and that the Respondents are using the confidential information and trade connections the Respondent made while working for the Applicant to lure customers and to compete by undercutting the Applicant’s prices.

[19] The Applicant seeks an order to interdict and restrain the Respondent from divulging any confidential information of the Applicant and from being employed by B-Sure or any other entity engaged in any activity relating to brokering or selling short-term insurance.

The applicable legal principles

[20] A party seeking to enforce a contract in restraint of trade is required to invoke the restraint agreement and prove a breach thereof.

Thereupon a respondent who seeks to avoid the restraint bears an onus to demonstrate, on a balance of probabilities, that the restraint

agreement is unenforceable because it is unreasonable.[2]

[21] The test set out in Basson v Chilwan and Others[3] (Basson), to determine the reasonableness or otherwise of a restraint of trade provision is the following –

a. Is there an interest of the one party, which is deserving of protection at the termination of the agreement?

b. Is such interest being prejudiced by the other party?

c. If so, does such interest so weigh up qualitatively and quantitatively against the interest of the latter party that the latter should not be economically inactive and unproductive?

d. Is there another facet of public policy having nothing to do with the relationship between the parties but which requires that the restraint should either be maintained or rejected?

[22] In Kwik Kopy (SA) (Pty) Ltd v van Haarlem and Another,[4] a further consideration was added namely whether the restraint goes further than is necessary to protect the interest.

[23] In Jonsson Workwear v Williamson and another[5] (Jonsson) the Court summarised the factors to be considered and held that:

‘In simple terms therefore, and what needs to be considered in determining whether or not the enforcement of a restraint of trade

would be reasonable, are five issues, being (a) the existence of a protectable interest, (b) the breach of such protectable interest, (c) a quantitative and qualitative weigh [of] the respective interests of the parties, (d) general considerations of public interest, and (e) whether the restraint goes further than necessary to protect the relevant interest. All these considerations need to [be] determined as a whole, as part of a value judgment to be exercised, in order to finally conclude whether or not the restraint should be enforced.’

[24] Insofar as the first leg of the test in Basson is concerned, it is well established that the proprietary interests that can be protected by a restraint agreement are essentially of two kinds, namely –

a. All confidential matter which is useful for the carrying on of the business and which could be used by a competitor, if disclosed to the competitor, to gain a relative competitive advantage. Such confidential material is compendiously referred to as “trade secrets”; and

b. The relationships with customers, potential customers, suppliers and others that make up what is compendiously referred to as the “trade connections” of the business.[6]

[25] Whether information constitutes a trade secret is a factual question. For information to be confidential it must be –

a. capable of application in trade or industry, that is, it must be useful and not be public knowledge and property;

b. known only to a restricted number of people or a closed circle; and

c. of economic value to the person seeking to protect it.[7]

[26] As to customer connection, the need of an employer to protect its trade connections arises when the employee has access to customers and is in a position to build up a particular relationship with a customer so that when the employee leaves the employer’s service, he or she could easily induce the customers to follow him or her to a new business.

[27] In Labournet (Pty) Ltd v Jankielsohn and Another[8] (Labournet), the Labour Appeal Court held that:

‘[40] The enquiry into the reasonableness of the restraint is essentially a value judgment that encompasses a consideration of two policies, namely the duty on parties to comply with their contractual obligations and the right to freely choose and practice a trade, occupation or profession. A restraint is only reasonable and enforceable if it serves to protect an interest, which, in terms of the law, requires and deserves protection. The list of such interests is not closed, but confidential information (or trade secrets) and customer (or trade) connections are recognised as being such interests. To seek to enforce a restraint merely in order to prevent an employee from competing with an employer is not reasonable.

[41] According to the Appellate Division in Basson v Chilwan and Others, the following questions require investigation, namely, whether the party who seeks to restrain has a protectable interest, and whether it is being prejudiced by the party sought to be restrained. Further, if there is such an interest – to determine how that interest weighs up, qualitatively and quantitatively, against the interest of the other party to be economically active and productive. Fourthly, to ascertain whether there are any other public policy considerations which require that the restraint be enforced. If the interest of the party to be restrained outweighs the interest of the restrainer – the restraint is unreasonable and unenforceable.’ (Footnotes omitted)

[28] It is within the context of the aforesaid principles that this application is to be decided.

The Applicant’s onus

[29] The Applicant has to establish that the Respondent furnished the restraint undertakings sought to be enforced and that she has breached those undertakings in the respects as alleged by the Applicant.

The contract

[30] It is common cause that the Respondent concluded the agreement, containing the restraint of trade undertakings sought to be enforced by the Applicant. The contract provides as follows:

‘RESTRAINT OF THE TRADE

During your tenure of employment you will not be permitted to render services for gain which are in conflict, or in competition, with the services rendered by Savvy Brokers (Pty) Ltd, which, in essence, is insurance, unless this, of the specific case(s) where this applies, has been agreed to in writing.

It is furthermore an express condition that, during your employment as well as for a period of 2 (two) years, after termination of service with Savvy Brokers (Pty) Ltd you will not for any reason, nationally.

i) Be engaged, interested or concerned, whether financially or otherwise and whether directly or indirectly, in, or

ii) Be a director of or a shareholder, directly or indirectly, in or

iii) Act as a consultant or advisor to or be an employee of, or

iv) Directly or indirectly finance, any business of insurance broking, underwriting, insurance consultants, insurance agents, claim setting agents (or be a party directly or indirectly to any management contracts relating to any such business); or nay other business which may directly or indirectly compete with the that carried on by the employer, save for his employment with the employer.

You undertake that you will not directly or indirectly make contact with any of the clients, dealers, dealerships, go-betweens or intermediaries Savvy Brokers (Pty) Ltd with the view to secure or solicit business which is in conflict or in competition with the services rendered by Savvy Brokers (Pty) Ltd at the time.

The prohibited contact referred to above is any form of contact either directly by yourself and/or through any other party, employer, intermediary, associate, friend, relative, ex-employees etc. This prohibition includes divulging information regarding Savvy Brokers (Pty) Ltd of its clients, contacts, associates, intermediaries, principals, dealers, dealerships etc to anyone (past or present) with the view of channeling business away or enticing clients, dealers, dealerships (past or present) to take their business elsewhere and place it with or through anyone else.

Go-between and intermediaries referred to above inter-alia includes Savvy Brokers (Pty) Ltd

The parties agree that, in the event of a breach of any of the stipulations referred to under the above that the employee consent to being sued for damages agreed to as being equal to the total of the last twelve month’s gross earning earned immediately prior to termination.’

[31] The Applicant’s case is that the Respondent worked under Mr Gardener and as such, she had access to sensitive information that is both confidential and proprietary to the Applicant. This is specifically, knowledge of the Applicant’s pricing strategies, sales techniques, how staff are trained and incentivized, customer connection and details, customer needs and the products they purchased.

[32] Furthermore, as Mr Gardener’s assistant, the Respondent was introduced to all of the Applicant’s ‘major supporters and dealerships’ under Gardener and as a result, she formed close relationships with the dealers and dealerships.

The Respondent’s breach

[33] It is common cause that the Respondent took up employment with B-Sure, a competitor of the Applicant, which constitutes a breach of the agreement.

The Respondents’ onus

[34] In seeking to avoid the enforcement of the restraint, the Respondent bears the onus to show that the restraint against her should not be enforced because to do so would be, on an application of the test in Basson, unreasonable and contrary to public policy.

[35] The Respondent opposes the relief sought in this application on the following grounds: Her position at the Applicant was that of an assistant to Mr Gardener since July 2020 and she held the same position until she left the Applicant’s employ in April 2022. Notwithstanding the fact that the employment contract describes her job title as that of a dealer sales consultant, she was

not working as a dealer sales consultant, but as an executive sales assistant to Mr Gardener. Her duties were not those as reflected in the contract of employment, but instead she followed up on outstanding payments, attended to pre-delivery documents, obtained

quotations of insurance products for Mr Gardener, sold policies when Mr Gardener was unable to do so and reported on sales statistics.

[36] The Respondent disputed that she developed a particular relationship with any dealer and as Mr Gardener’s assistant, she performed only a supporting role and only had contact with the dealers Mr Gardener already had a long and lasting relationship with. She did not develop or maintain any trade connections of her own.

[37] The Respondent submitted that there is nothing inherently proprietary or protectable in the functions she had performed at the Applicant and she did not develop any relationship with any dealer that would enable her to induce them to follow her to a new business.

[38] Furthermore, the restraint of trade covenant is impermissibly wide as the enforcement thereof would leave the Respondent economically inactive. The Respondent submitted that the Applicant’s attempt to the enforcement of the restraint of trade and preclude her from being employed by B-Sure, is for an ulterior purpose and not to seek to protect its interests but is rather an attempt to stifle competition.

Analysis

[39] In Esquire System Technology (Pty) Ltd t/a Esquire Technologies v Cronjé and another,[9] the position regarding restraints of trade in our law, having considered the position before and after the constitutional dispensation, has been summarised as follows:

‘1. Covenants in restraint of trade are valid. Like all other contractual stipulations, however, they are unenforceable when, and to the extent that, their enforcement would be contrary to public policy. It is against public policy to enforce a covenant which is unreasonable, one which unreasonably restricts the covenantor's freedom to trade or to work.

2. Insofar as it has that effect, the covenant will not therefore be enforced. Whether it is indeed unreasonable must be determined with reference to the circumstances of the case.

3. Such circumstances are not limited to those that existed when the parties entered into the covenant. Account must also be taken of what has happened since then and, in particular, of the situation prevailing at the time the enforcement is sought.

4. Where the onus lies in a particular case is a consequence of the substantive law on the issue.

5. What that calls for is a value judgment, rather than a determination of what facts have been proved, and the incidence of the onus accordingly plays no role.

6. A court must make a value judgment with two principal policy considerations in mind in determining the reasonableness of a restraint:

6.1. The first is that the public interest required that parties should comply with their contractual obligations, a notion expressed by the maxim pacta servanda sunt.

6.2. The second is that all persons should in the interests of society be productive and be permitted to engage in trade and commerce or the professions.’

[40] The point of departure is that restraint of trade agreements are valid. The restraint of trade clause will be enforceable if there is an interest that requires protection and insofar as it is reasonable.

[41] The starting point in an application such as this one, is that a party seeking to enforce a restraint of trade is required to invoke the restraint agreement and prove a breach thereof. If the restraint is reasonable, it will be enforceable.

[42] The party seeking to avoid the restraint, bears the onus to show that on a balance of probabilities that the restraint agreement is unenforceable because it is unreasonable.[10]

[43] Whether a restraint of trade clause will ultimately be enforceable, is a separate question that requires an assessment of the reasonableness thereof.

[44] The first question this Court must consider is whether the Applicant, as the party who seeks to restrain, has a protectable interest, and whether it is being prejudiced by the Respondent. Further, if there is such an interest – determine how that interest weighs up, qualitatively and quantitatively, against the interest of the Respondent to be economically active and productive.

Confidential information

[45] In Experian SA (Pty) Ltd v Haynes & another[11] the issue of confidential information was considered and the Court held that:

‘It is trite that the law enjoins confidential information with protection. Whether information constitutes a trade secret is a factual question. For information to be confidential it must be capable of application in the trade or industry, that is, it

must be useful and not be public knowledge and property; known only to a restricted number of people or a closed circle; and be of economic value to the person seeking to protect it.’

[46] In Jonsson[12], the Court found that:

‘What thus must now be done, as part of the value judgment to be exercised in this matter, is to determine whether there is a case made out on the proper accepted facts as to whether the information the first respondent had access to whilst employed with the applicant would fall within the parameters of what could be classified as confidential information in terms of the above authorities, and also whether this information would be of benefit to the second respondent as employer of the first respondent.’

[47] In support of its case, the Applicant stated that during her employment, the Respondent, who worked under Mr Gardener, had access to sensitive information that is both confidential and proprietary to the Applicant. This is knowledge of the Applicant’s pricing strategies, sales techniques, how staff are trained and incentivized, customer connection and details, customer needs and the products they purchased.

[48] In her answering affidavit, the Respondent stated that the Applicant does not have protectable interests. She dealt with the aforesaid allegations made by the Applicant in detail. She pointed out that the Applicant did not specify as to what is meant by ‘pricing strategies’. She knows of no ‘sales techniques’ used by the Applicant other than sales scripts, which are simply prescribed sets of talking points that are used by sales consultants when engaging with a prospective client as the Respondent’s primary function was not to make sales, she was never given a sales script to use when she was appointed as Mr Gardener’s assistant. The Respondent submitted that there is nothing special about the sales scripts as they can be downloaded for free from the internet.

[49] The Respondent stated that she did not have any knowledge of confidential staff training and incentives and that the nature of the industry is such that there is no need for specific skills and knowledge in respect of every different insurance brokerage as the short-term insurance business is virtually the same across the board.

[50] I already alluded to the fact that the Applicant has to show that it has an interest in its confidential information that is worthy of protection and that for information to be confidential, it must be capable of application in the trade or industry; must be useful and not be public knowledge and property; known only to a restricted number of people or a closed circle; and be of economic value to the person seeking to protect it. These requirements apply because not all information obtained by an employee during the course of his or her employment or which he or she had access to during the execution of duties, will be secret or confidential.

[51] The question is whether a case was made out on the proper accepted facts as to whether the information the Respondent had access to, whilst employed with the Applicant, would fall within the parameters of what could be classified as confidential information.

[52] In Labournet, the LAC pointed out that Labournet liberally resorted to generalities and did not deal with specifics, even though it was essential for Labournet to deal specifically with Jankielsohn as an individual it sought to restrain.

[53] In David Crouch Marketing CC v du Plessis,[13] the Court also dealt with the issue of confidential information and said that where a former employer wishes to rely on or enforce a restraint of trade agreement in order to protect secrets and confidential information, it must show that the information, know-how, technology or method is unique and peculiar to its business and that such information is not public property or that it falls within the public's knowledge. In other words, the former employer must show that the interest that it has in the information it seeks to protect, is indeed worthy of protection. Not all information obtained by the employee during the course of his employment will be secret or confidential. The Court held that:

‘The applicant in its founding affidavit also submits that its modus operandi and products as well as its services are indeed confidential

and worthy of protection. The applicant again does not elaborate or give any details as to why these products, modus operandi and

services are worthy of protection. Why these aspects are so unique is not clear from the founding affidavit. I am again in agreement with the submission advanced on behalf of the respondent that, without elaborating on the details of the applicant's alleged unique modus operandi, products and services, it must be accepted that the applicant has no unique modus operandi, products or services

that are worthy of protection.’

[54] The proper approach to determining the facts was authoritatively set out in Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd[14]. Thus, when factual disputes arise in circumstances where the applicant seeks final relief, the relief should be granted in favour of the applicant only if the facts alleged by the respondent in its answering affidavit, read with the facts it has admitted to, justify the order prayed for.

[55] This application is to be decided by applying the Plascon-Evans rule.

[56] The Applicant filed a replying affidavit in response to the allegations made by the Respondent. Instead of answering to the detailed denial of having had access to confidential and proprietary interests, the Applicant made a vague and unsubstantiated allegation that it has a protectable interest, that the Respondent has intimate knowledge of the Applicant’s business and its management that will severely compromise its business. The Applicant further stated that it would not delve into a lengthy response to the Respondent’s answering affidavit.

[57] This Court is not told in any detail, even in the replying affidavit, what specifically the confidential information is that the Applicant seeks to protect, whether it is capable of application in the industry or whether it will be useful to a competitor or be of any economic value to the Applicant. This Court is provided with no more than vague and unsubstantiated statements, which, even in the face of a detailed answering affidavit, are not expanded upon and no detail is provided.

[58] Applying the Plascon-Evans rule, the Applicant has not made out a case in respect of the confidential information it seeks to protect.

Customer connections

[59] The Applicant has further approached this Court for relief because the Respondents are using the trade connections the Respondent made while working for the Applicant to lure customers.

[60] In Continuous Oxygen Suppliers (Pty) Ltd t/a Vital Aire v Meintjes and another[15] the Court in considering the question whether there was indeed a protectable interest held that:

‘As I pointed out in Esquire Technologies, a restraint is valid if there is a proprietary interest which justifies protection. Those interests are usually in the nature of trade secrets, know-how, pricing or customer connections. Therefore, a restraint would be an enforceable restriction on the activities of an employee who (for example) had access to the company's customers and could use his/her relations with the company's customers to the advantage of a competitor and to the detriment of the company.’

[61] In Morris (Herbert) Ltd v Saxelby[16] it was held that the relationship must be such that the employee acquires “such personal knowledge of and influence over the customers of his employer … as will enable him (the servant or apprentice), if competition were allowed, to take advantage of his employer’s trade connection.”

[62] In Rawlins and Another v Caravantruck (Pty) Ltd,[17] the Court considered whether there was an attachment between the employee to be restrained and the customer and held that:

‘Whether the criteria referred to are satisfied is essentially a question of fact in each case, and in many, one of degree. Much will depend on the duties of the employee; his personality; the frequency and duration of contact between him and the customers; where such contact takes place; what knowledge he gains of their requirements and business; the general nature of their relationship (including whether an attachment is formed between them, the extent to which customers rely on the employee and how personal their association is); how competitive the rival businesses are; in the case of a salesman, the type of product being sold; and whether there is evidence that customers were lost after the employee left.’

[63] In Labournet[18], the LAC held that:

‘Regarding the other protectable interests claimed by Labournet, namely, customer or trade connections, they are protectable provided it is established on the facts that the attachment, between the employee sought to be restrained and those customers, was of such a nature that the employee would be able to induce those customers to follow him or her.’

[64] A customer connection is a protectable interest and should be protected provided that it is established that the connection is of such a nature that the employee would be able to induce the employer’s customers to follow him or her.

[65] It is evident from the dicta in the authorities referred to that the Applicant has to show that the customer connection exists and that it could be exploited.

[66] In the Applicant’s founding affidavit, it is alleged that the Respondent, as Mr Gardener’s assistant, was introduced to all the Applicant’s ‘major supporters and dealerships’ under Gardener and as a result, she formed close relationships with the dealers and dealerships. Furthermore, that it was the main task of the Respondent to introduce and service existing F&I’s and dealerships of the Applicant.

[67] In her opposing affidavit, the Respondent denied that her main task was to introduce and service existing F&I’s and dealerships of the Applicant. She would have performed those duties as a dealer sales consultant, but that was not the duties she had performed. Although the Respondent’s contract described her job title as dealer sales consultant, she did not perform the duties of a dealer sales consultant, instead, she worked as Mr Gardener’s assistant since July 2020. Her duties as Mr Gardener’s assistant differed materially from the duties of a dealer sales consultant and as his assistant, she performed a supporting role. The Applicant’s case is that she did not meet a dealer in person and that the dealers she had contact with, all had long-standing relationships with Mr Gardener and that she did not develop or maintain any relationship with any of the Applicant’s dealers. Her contact with the dealers was infrequent, brief and never with the intention or effect of forming a relationship.

[68] The Respondent further stated that the Applicant’s business within the short-term insurance industry is that of direct marketing insurance brokering and dealer sales. Once a product is sold to a client, the Applicant’s business with that client is concluded and contact after the sale is uncommon as there is no after-sale service and relationships are not developed with the clients.

[69] The Applicant filed a replying affidavit in response to the allegations made by the Respondent. The Applicant stated that the Respondent did not deny that she had interacted with dealers and that this admission per se constitutes the need to protect the interest of the Applicant.

[70] The stance adopted by the Applicant is ill-advised and disconnected from the applicable authorities.

[71] The Applicant must show that the relationship between the Respondent and the Applicant’s dealers or clients is such that the Respondent acquired personal knowledge of and influence over the customers of the Applicant to enable her to take advantage of that trade connection. The Applicant did not dispute the duties performed by the Respondent, as stated in her answering affidavit. There is no information provided to this Court regarding the frequency and duration of contact between the Respondent and the customers or the nature of their relationship. Vague and unsubstantiated statements are made that the Respondent, as Mr Gardener’s assistant, was introduced to the major dealers under Mr Gardener. The mere contact with or introduction to a client is not enough and more is needed to enforce the restraint. The Applicant had to make out a case, at least, that the Respondent had formed relationships with its clients to the extent that customers rely on the Respondent only, that the relationship is personal and of such a nature that the Respondent would be able to induce those customers to follow her.

[72] In short: the Applicant had to demonstrate that the Respondent has the ability to carry the customers in her pocket and that because of her employment with B-Sure, the Applicant’s customers would follow her.

[73] No such case has been made out in the Applicant’s papers. Instead, it seems that the Applicant was of the view that the mere allegation that the Respondent had contact with customers, would suffice. In fact, it appears that the Applicant lost sight of the

fact that a case must be made out for the relief sought, that each case will be decided on its own merits, based on the fact placed

before Court and that relief sought will not merely be granted because it was granted in another matter between the same parties.

Conclusion

[74] The Applicant’s case, in short, is that the restraint agreement is breached by the fact that the Respondent took up employment with B-Sure, which is prohibited in terms of the restraint agreement, as B-Sure is a direct competitor of the Applicant.

[75] I accept that as B-Sure is a direct competitor of the Applicant, the Respondent’s employment with B-Sure would prima facie be a breach of the restraint of trade agreement and would infringe the Applicant’s protectable interest. However, it is always subject to the determination of the existence of a protectable interest and an actual infringement, based on the facts.

[76] The question is this: is there an interest deserving of protection and is such an interest being prejudiced?

[77] Considering all the facts placed before me and applying the Plascon-Evans test, the answer is no. I will deal with the reasons infra.

[78] In respect of confidential information, the Applicant failed to put convincing evidence before this Court to show that there is confidential information which requires protection. Unsubstantiated and vague allegations were made.

3. The Respondent on the other hand, dealt with the allegations regarding confidential information in detail and she did not just baldly deny the Applicant’s case regarding confidential information, but she explained it in the context of her duties and employment with the Applicant.

[79] The Applicant made bald and unsubstantiated allegations in this regard and has failed to convince me that there is indeed confidential information that requires protection as being capable of being applicable in trade or industry, not in the public knowledge and property, known only to a restricted number of people or a close circle, and of economic value to the Applicant.

[80] The averments made by the Applicant were lacking in substance and were of such a generalised nature, that it was of no assistance to obtain the relief sought from this Court.

[81] In respect of customer connections, there was no evidence, let alone convincing evidence, placed before this Court to show that the Respondent has a special relationship with the Applicant’s customer and that because of the relationships she had forged during her employ with the Applicant, the Applicant will lose those customers as they will follow the Respondent, wherever she goes.

[82] Once again, in respect of customer connections the Respondent did not merely put up a bare denial, but she provided a version and context, which were not disputed by the Applicant, notwithstanding the fact that a replying affidavit was filed.

[83] The facts placed before this Court did not demonstrate that the Respondent had forged strong relationships with the Applicant’s customers, to the extent that they will follow her. Not a single averment has been made to that effect and the Applicant failed to demonstrate that the Respondent would be able to induce the Applicant’s customers to follow her to another employer.

[84] In my view, the Applicant dismally failed to demonstrate that it has a protectable interest.

[85] Having found that there is no protectable interest and that there is no infringement, there is no need to consider the other questions set out in Basson as the need to consider the other questions relating to the interests of the parties and the public policy, only arises if there is a protectable interest that is being prejudiced, which is, in casu, not the case.

[86] An application for a final interdict must be satisfied on three essential requisites, namely –

a. a clear right of the party asserting it;

b. an injury actually committed or reasonably apprehended; and

c. the absence of any other satisfactory remedy that may have been available to the party seeking the interdict.[19]

[87] The Applicant failed to demonstrate the very first requirement of a clear right in this matter and the enquiry should go no further.

Costs

[88] The Applicant elected to invoke this Court’s jurisdiction under section 77(3) of the Basic Conditions of Employment Act[20], a jurisdiction that the Court exercises concurrently with the civil courts. In these circumstances the rule applied in those courts that costs ordinarily follow the result, is to be applied.

[89] In casu, both parties also argued for costs and I can see no reason why costs should not follow the result.

[90] In the premises, I make the following order:

Order

1. The application is dismissed with costs.

Connie Prinsloo

Judge of the Labour Court of South Africa

Appearances:

For the Applicant:

R du Toit from Clark Attorneys

For the Respondents:

E J J Nel

Instructed by:

Jansen & Jansen Inc Attorneys

[1] Act 37 of 2002.

[2] See: Basson v Chilwan and Others [1993] ZASCA 61; 1993 (3) SA 742 (A) (Basson) at 7761I-J; Magna Alloys and Research (SA) (Pty) Ltd v Ellis [1984] ZASCA 116; 1984 (4) SA 874 (A) at paras [10] - [14] (Magna Alloys); Reddy v Siemens Telecommunications (Pty) Ltd 2007 (2) SA 486 (SCA) (Reddy); Den Braven SA (Pty) Ltd v Pillay and another 2008 (6) SA 229 (D) (Den Braven); Experian South Africa (Pty) Ltd v Haynes and another 2013 (1) SA 135 (GSJ) (Experian).

[3] Basson supra at 767 C-H.

[4] 1999 (1) SA 472 (W) at 484E.

[5] (2014) 35 ILJ 712 (LC) at para 44.

[6] See: Sibex Engineering Services (Pty) Ltd v Van Wyk and Another 1991 (2) SA 482 (T) at 502D/E-F.

[7] See: Townsend Productions (Pty) Ltd v Leech and Others 2001 (4) SA 33 (C) at 53J-54B; Mossgas (Pty) Ltd v Sasol Technology (Pty) Ltd [1999] 3 All SA 321 (W) at 333F, Walter McNaughten (Pty) Ltd v Schwartz 2004 (3) SA 381 (C) at 389.

[8] (2017) 38 ILJ 1302 (LAC) at para 40 - 41.

[9] (2011) 32 ILJ 601 (LC) at para 37.

[10] Basson supra at 7761I-J; Magna Alloys supra at paras 10] to 14; Reddy supra; Den Braven supra; Experian supra.

[11] Experian supra at para 19.

[12] Jonsson supra at para 49.

[13] (2009) 30 ILJ 1828 (LC) at para 31.

[14] [1984] ZASCA 51; 1984 (3) SA 623 (A) at 634H-635C, where it was held: ‘It is correct that, where in proceedings on notice of motion disputes of fact have arisen on the affidavits, a final order, whether it be an interdict or some other form of relief, may be granted if those facts averred in the applicant's affidavits which have been admitted by the respondent, together with the facts alleged by the respondent, justify such an order. The power of the Court to give such final relief on the papers before it is, however, not confined to such a situation. In certain instances the denial by respondent of a fact alleged by the applicant may not be such as to raise a real, genuine or bona fide dispute of fact... If in such a case the respondent has not availed himself of his right to apply for the deponents concerned to be called for cross-examination under Rule 6(5)(g) of the Uniform Rules of Court... and the Court is satisfied as to the inherent credibility of the applicant's factual averment, it may proceed on the basis of the correctness thereof and include this fact among those upon which it determines whether the applicant is entitled to the final relief which he seeks... Moreover, there may be exceptions to this general rule, as, for example, where the allegations or denials of the respondent are so far-fetched or clearly untenable that the Court is justified in rejecting them merely on the papers...’

[14] [1984] ZASCA 51; 1984 (3) SA 623 (A) at 634H-635C, where it was held:

‘It is correct that, where in proceedings on notice of motion disputes of fact have arisen on the affidavits, a final order, whether it be an interdict or some other form of relief, may be granted if those facts averred in the applicant's affidavits which have been admitted by the respondent, together with the facts alleged by the respondent, justify such an order. The power of the Court to give such final relief on the papers before it is, however, not confined to such a situation. In certain instances the denial by respondent of a fact alleged by the applicant may not be such as to raise a real, genuine or bona fide dispute of fact... If in such a case the respondent has not availed himself of his right to apply for the deponents concerned to be called for cross-examination under Rule 6(5)(g) of the Uniform Rules of Court... and the Court is satisfied as to the inherent credibility of the applicant's factual averment, it may proceed on the basis of the correctness thereof and include this fact among those upon which it determines whether the applicant is entitled to the final relief which he seeks... Moreover, there may be exceptions to this general rule, as, for example, where the allegations or denials of the respondent are so far-fetched or clearly untenable that the Court is justified in rejecting them merely on the papers...’

[15] (2012) 33 ILJ 629 (LC) at para 34.

[16] [1916] 1 AC 688 (HL) at 709.

[17] [1992] ZASCA 204; 1993 (1) SA 537 (A) at 541G-I.

[18] Labournet supra at para 51.

[19] See: Setlogelo v Setlogelo 1914 AD 221; Minister of Health v Drums and Pails Reconditioning CC t/a Village Drums and Pails 1997 (3) SA 867 (N) at 872C.

[20] Act 75 of 1997, as amended.