Shoprite Checkers (Pty) Ltd v Grobbelaar and Others (460/2004) [2005] ZASCA 89 (26 September 2005)

Shoprite Checkers (Pty) Ltd v Grobbelaar and Others (460/2004) [2005] ZASCA 89 (26 September 2005)

The Supreme Court of Appeal found that the rights under the restraint of trade agreements were not merely personal to SCEB but attached to the business and thus passed to the appellant upon transfer of the business. The evidence established that Shoprite Holdings was the sole shareholder of SCEB and had approved the...

Source-derived case information.

Citation
[2005] ZASCA 89
Parties
Appellant: Shoprite Checkers (Pty) Ltd; Respondent: L J J Grobbelaar; Respondent: D J M Heyns; Respondent: P C Welgemoed
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
26 September 2005
Case Number
460/2004
Procedural Posture
Civil Appeal / Appeal Against Absolution From the Instance After Plaintiff's Case
Outcome
Appeal upheld; absolution from the instance set aside; matter remitted to trial court.
Judges
Combrinck, Howie, Zulman, Nugent, Mlambo
Legal Topics
Restraint of Trade, Company Asset Disposal, Locus Standi, Section 228 Companies Act, Contract Breach
Commercial and Corporate Civil Procedure Restraint of Trade Company Asset Disposal Locus Standi Section 228 Companies Act Contract Breach

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Summary, issues, holding and outcome

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Parties

Shoprite Checkers (Pty) Ltd

Appellant

L J J Grobbelaar

Respondent

D J M Heyns

Respondent

P C Welgemoed

Respondent

Procedural Posture

Civil Appeal / Appeal Against Absolution From the Instance After Plaintiff's Case

Legal Issues

  1. 1 Whether the appellant acquired the rights under the restraint of trade agreements from SCEB and thus had locus standi to enforce them.
  2. 2 Whether the respondents breached the restraint of trade agreements.
  3. 3 Whether there was a causal link between the alleged breach and the damages suffered by the appellant.

Ratio Decidendi

The Supreme Court of Appeal found that the rights under the restraint of trade agreements were not merely personal to SCEB but attached to the business and thus passed to the appellant upon transfer of the business. The evidence established that Shoprite Holdings was the sole shareholder of SCEB and had approved the transaction, satisfying the requirements of section 228 of the Companies Act. The court held that formal compliance with section 228 was unnecessary where the sole shareholder consented and was a party to the contract. The appellant presented sufficient prima facie evidence of breach of the restraint agreements and causality between the breach and the loss of clients. The...

Court Disposition

Appeal upheld; absolution from the instance set aside; matter remitted to trial court.

Orders

  • The appeal succeeds with costs, including the costs of two counsel but excluding the costs of the application to lead further evidence.
  • The appellant is ordered to pay the respondents' costs of the application to lead further evidence.