South Africa: High Courts - Gauteng

NOT REPORTABLE

IN THE HIGH COURT OF SOUTH AFRICA

JOHANNESBURG

CASE NO: 01/13329

DATE:2001-06-14

In the matter between

FERRO INDUSTRIAL PRODUCTS (PTY) LTD............................................................Applicant

and

MARE, GABRIEL STEPHANUS.......................................................................First Respondent

VEREGUARD (PTY) LTD............................................................................Second Respondent

JUDGMENT

WILLIS, J: The applicant has sought the following relief:

1. That the first respondent be and is hereby interdicted for a period of 12 months from 1 April 2001 from being engaged directly or indirectly with the competitors of the applicant within all magisterial areas in the Republic of South Africa.

2. The first respondent be and is hereby interdicted for a period of 1 2 months and within the area referred to in paragraph 2 from contacting and/or soliciting as customers of the second

"By virtue of the fact that the first respondent is a shareholder of the applicant he is bound by the terms thereof. Relevant to this application are the paragraphs dealing with the restraint of trade which is applicable to all the shareholders in the applicant which reads as follows:-The relevant extract is then quoted. It is a lengthy extract and I do not believe it is necessary to read it out in full. I shall merely note that there is a restraint of shareholders in the company for a period of 12 months from carrying on business in certain prescribed areas and there are further extensive terms and conditions relating to other aspects of the restraint which would explain the wide terms in which the applicant has sought the relief referred to above.

The Trust Deed upon which the applicant relies defines "the company" as "Ferro Industrial Products (Pty} Ltd" (i.e. the applicant). In that Trust Deed the "shareholders' agreement" is defined as "means the agreement regulating the relationship between the shareholders of the company from time to time including any amendment, variation, modification of the shareholders' agreement existing at the date of the execution of this trust deed or any substituted shareholders' agreement entered into hereinafter".

The shareholders' agreement entered into in June 2000 is entered into between the following parties: Global Trading and Investment Co (Pty) Ltd, Dysart Investment Co (Pty) Ltd, Kenco Investments (Pty) Ltd, The WP Klapprott Family Trust, the Ferro Industrial Products Share Trust, the Ferro Industrial Products (Pty) Ltd (i.e. the applicant), William Peter Klapprott, Kenneth John Philip Case and Lawrence Ronald Tollemache.

It will immediately become apparent that the first respondent is not a party to the shareholders' agreement entered into during June 2000 at Brakpan. The shareholders' agreement referred to in the Trust Deed clearly refers to an agreement "between the shareholders of the company" (i.e. the applicant}. The acceptance of the offer of shares to the first respondent in the applicant, clearly denotes an acceptance to be bound by a shareholders' agreement "regulating the relationship between the shareholders of the company (i.e. the applicant) inter se". In other words, to summarise the facts very briefly, the shareholders' agreement which the applicant seeks to enforce against the first respondent is not the shareholders' agreement referred to in either the Trust Deed or the acceptance by the first respondent of shares in the applicant.

Accordingly I cannot see how the applicant can seek to enforce this shareholders' agreement entered into in June 2000 as against the first respondent. In my view, the point in limine taken by counsel for the first respondent was well taken and in the result the application is dismissed with costs.