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IN THE HIGH COURT OF SOUTH AFRICA

(GAUTENG DIVISION, PRETORIA)

 

Case Number: 88464/2015

NOT REPORTABLE

OF INTEREST TO OTHER JUDGES

REVISED

DATE:  4/12/2015

 

In the matter between:

 

ASSESSMENT CENTRE TECHNOLOGIES (PTY) LTD                                    APPLICANT

And

MACDONALD DUDU MAKITLA                                                                1^st RESPONDENT

DAWN NELSON                                                                                       2^nd RESPONDENT

THOMAS SA (PTY) LTD                                                                           3^rd RESPONDENT

 

JUDGMENT

 

Fabricius J,

1.

This is an urgent application which I heard just about the whole day on Thursday 26 November 2015. The file was handed to me on Tuesday afternoon. I heard other applications on Wednesday morning. The application comprises 546 pages. It concerns and raises material questions of fact and law. Counsels’ Heads of Argument comprise another 107 pages and deal in great detail with material conflicts of fact and difficult questions of law that need to be properly and carefully decided.

 

2.

The application seeks to enforce restraint of trade agreements entered into by the First and Second Respondents with the Applicant. Applicant’s business involves the provision of professional psychological services via psychologists and psychometrists, doing assessment centre development, delivery of assessment centres to clients by applying a number of psychological tests and role-plays to candidates, observing the candidates and then writing a psychological feedback report to clients. The Third Respondent offers psychological and psychometric services to customers using the Thomas assessment tools and products. It was registered on 31 July 2015. There is a whole and detailed history behind these brief facts which are not contained in the Founding Affidavit, but were dealt with in great detail in the Answering Affidavit and in Respondents’ Heads of Argument. At the very least, they are relevant to the question whether or not the Applicant and the Third Respondent are competitors, and to which degree.

 

3.

The First Respondent was employed by Applicant with effect from July 2013 as its National business development consultant until he resigned with effect 30 April 2014. His restraint term will expire on 29 April 2016.

 

4.

The Second Respondent, a psychometrist, was employed by Applicant from 15 October 2012 until 30 September 2015. The commenced employment with Third Respondent from 1 October 2015. 

 

5.

In terms of the prayers in the Notice of Motion a very widely framed final interdict was sought against the First and Second Respondents, and in the alternative, as per prayer 9, an interim interdict was sought, with reference to par. 2 to 8 of the Notice of Motion “in the same terms pending the finalisation of this application, alternatively pending an action”. An order against the Second Respondent, as a result of the restraint agreement, would endure until 29 September 2017.

 

6.

According to prayer 8 the following relief was sought against Third Respondent:

“The Third Respondent is interdicted and restrained from unlawfully interfering in the Applicant’s contractual arrangements with its employees and erstwhile employees by employing such persons contrary to the restraint undertakings in the employment contract with the Applicant”. Again, this order is very wide and refers in its own terms to employees who are not before Court. Applicant’s Counsel told me that it actually meant that their employment with Third Respondent would have to be terminated with immediate effect.

 

7.

Having been confronted with a very detailed answering affidavit which dealt with substantial disputes of fact and serious questions of law, the Applicant in its Replying Affidavit advised that it would seek an interim order only. During argument the Office of the Deputy Judge President advised me that if such an order was issued, the return date in the Opposed Motion Court would be 22 March 2016, which would make any relief granted against the First Respondent almost academic, whilst it would have serious consequences against the Second Respondent.

 

8.

All Respondents gave undertakings, so-called common law undertakings that they, in respect of the First and Second Respondents, would not impart any confidential information or act otherwise in breach of their restraint agreements. This may however not be good enough in general terms as a defence

See: Reddy v Siemens Telecommunications (Pty) Ltd 07 (2) SA 486 SCA.

The Third Respondent in turn said that it would not interfere with the contractual arrangements between Applicant and its employees. Applicant’s claim against Third Respondent is in delict, and this undertaking may be a good defence depending on the context of each case.

See: Mcilongo v Minister of Law and Order 1990 (4) SA 181 ECD (Full Bench) at 186.

Where an Applicant, such as the present one, has not been able to point to one instance of an inducement or other wrongful act on behalf of the Third Respondent, apart from the mere fact of employing the First and Second Respondents, this undertaking must carry some weight and cannot be ignored, when I exercise my discretion, which I undoubtedly have, whether or not to grant an interim interdict.

See: Superior Court Practice, Erasmus, Second Edition, Vol 2 at D6 – 22 at par. 9.

9.

The requirements for an interim interdict are well known and are discussed in Erasmus in great detail.

 

10.

I need to look at all the issues before me holistically. Applicant said that it became aware of the First and Second Respondents’ employment with Third Respondent only on 8 October 2015. However, in the case of First Respondent, this cannot be true and I do not accept it, having regard to an email sent on 1 September 2015 by C. Schutte, a director of Applicant. The Notice of Motion is dated 2 November 2015, and this raises a well-founded concern whether or not an application against First Respondent should not have been brought earlier.

 

11.

The tests for an interim interdict were fairly recently debated again, this time by the Constitutional Court in: National Treasury v Opposition to Urban Tolling Alliance 2012 (6) SA 223 at 235, although the context was different obviously. The prima facie right that must be established must be a right which, if not protected by an interdict, irreparable harm would ensue. In an Urgent Court this meant that this right had to be protected this week. It is always meant to prevent future conduct and not decisions already made. A Court must also be satisfied that the balance of convenience favours the granting of a temporary interdict. It must first weigh the harm to be endured by an Applicant, if interim relief is not granted, as against the harm a Respondent will bear, if the interdict is granted. All relevant factors must be considered carefully. To this I must add the requirement of the Urgent Court that an Applicant must show that if the matter is not heard immediately the Applicant will not be afforded substantial redress at a hearing in due course.

Applicant’s allegations in this context in the Founding Affidavit are rather vague and of a general nature only. It can also not be accepted, and this was conceded by Applicant’s Counsel, that major clients such as the South African Qualifications Authority, Tsogo Hotel and North West University, terminated the services of the Applicant as the result of the conduct of the First and Second Respondents. In fact they did so whilst these persons were still in Applicant’s employ. In fact, Applicant has not pointed to one single instance which would indicate that the present Respondents induced or persuaded any client of Applicant to jump ship.

 

12.

I must also add that Applicant has not stated in the Founding Affidavit why this application could not have been brought on a semi-urgent basis in the Third Court.

 

13.

Respondents’ Counsel, Mr Subel SC, in his Heads of Argument, in great detail debated the following material issues before me:

13.1

The urgency of the application in general, but in particular vis-à-vis the First Respondent;

13.2

Whether or not Applicant has a protectable interest in the case of the First and Second Respondents. This means that I must analyse the nature and extent of confidential information that the First and Second Respondents may have, as well as what customer connections they had;

13.3

Whether or not the restraint agreement is reasonable in respect of its area, its duration and its scope;

13.4

Whether or not Applicant and Third Respondent are competitors and if so, to which extent;

13.5

Whether or not it was sufficient for Applicant to rely on the mere fact that a competitor has employed the individuals, to found a cause of action in delict.

I can refer to IIR South Africa BV v Hall, 2004 (4) SA 174 W (Full Bench) at 184 at par. 20.2 in this context: “The competitor’s employment of the ex-employee with or without knowledge of the restraint cannot of itself amount to the delict of unlawful competition. Unlawful or unfair competition can only result of the new employer, through the ex-employee, was either intentionally or innocently confidential information of the ex-employee“. I was also referred to Masstores (Pty) Ltd v Pick ‘n Pay Retailers (Pty) Ltd [2015] ZASCA 164 (25 November 2015), where the Court repeated the three requirements that must be met for a successful claim based on the on the unlawful interference in a contractual relationship namely:

(a)         An unlawful act;

(b)         Which constitutes an interference in the contractual relationship; and

(c)         Which is committed with some form of dolus.

One must in this context remember that an important question remains, namely whether or not there was an enticement or inducement and what the new employers’ actual interest was.

13.6

Where the balance of convenience lies. It is in this context in particular that Applicant has based its case on vague generalization only. Respondents in turn made out a strong case based on facts which in my view could not be seriously challenged that the balance of convenience strongly favours the Respondents. The relief sought is in substance final. The areas referred to in prayers 2 and 5 are too wide and are not justified on the facts. Their involvement in the relevant business will practically come to a permanent end. Prayers 2 and 5 are particularly intrusive and unreasonable. The Respondents’ involvement with Applicant was not on an executive level, and there is almost no evidence that they were or are now, able to influence Applicant’s clients to turn to Third Respondent. First Respondent has not been in Applicant’s employment since 30 April 2014 and it is again extremely doubtful that he can prejudice Applicant as alleged. Whatever knowledge he had of Applicant’s business is at best of historical importance. Second Respondent seldom had access to decision-makers in her role as psychometrist. She did not solicit business at all.

 

14.

I therefore find that the balance of convenience does not favour Applicant. Also, using my discretion in the light of the facts discussed briefly sitting in the Urgent Court, I exercise my general discretion against Applicant. Apart from the mentioned deficiencies relating to the requirements for an interim interdict, there is nothing before me to show that Applicant’s prima facie right, whatever its nature and extent, had to be protected by an urgent order this week. It ought also to be clear that this application did not belong in the Urgent Court this week at all

 

15.

As a result I make the following order:

 

The application is dismissed with costs, including the costs of two Counsel.

 

 

_____________________________

JUDGE H.J FABRICIUS

JUDGE OF THE GAUTENG HIGH COURT, PRETORIA DIVISION

 

Case number: 88464/15

 

Counsel for the Applicant: Adv E. C. Labuscagne SC

Adv A. G. South

Instructed by: Adams and Adams

Counsel for the Respondents: Adv A. Subel SC

Adv C. C. Bester

Instructed by: Fluxmans Attorneys

Date of Hearing: 26 November 2015

Date of Judgment: 4 December 2015 at 10:00

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