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REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG LOCAL DIVISION, JOHANNESBURG

CASE NO:  22529/2018

In the matter between:

TEL-SCREW PRODUCTS (PTY) LTD                                                                    Applicant

and

DE BRUYN, DONNA JEAN                                                                        First Respondent

HUDACO TRADING (PTY) LTD trading as                                          Second Respondent

RUTHERFORD

 

J U D G M E N T

 

MODIBA J:

[1] On 1 November 2018, the applicant obtained an order on an urgent basis, enforcing a restraint of trade agreement against the respondents. The respondents seek a reconsideration of that order.

[2] The respondents allege that they did not oppose the application because it never came to their attention. The applicant served it by email to both respondents. It went to the first respondent’s junk folder. It was sent to the second respondent’s attorney’s incorrect email address and to its business address which according to the second respondent, although advertised on its website, is largely unattended to.

[3] The order enforcing the restraint was only served on the respondents on 6 December 2018. The applicant then engaged with the respondents to discontinue their employment relationship. They ultimately entertained the applicant’s demand at the end of January 2019 when the second respondent placed the first respondent on garden leave. During this time, the respondents disputed the effectiveness and enforceability of the restraint of trade agreement.

[4] The trite ultimate test for urgency is whether, despite a dilatory response to the application, the respondents will be denied substantial redress in due course if the application is not dealt with on the basis of urgency. In the present circumstances, they will be. The applicant is seek to enforce a three years restraint of trade only for one year. It will expire on 31 October 2019. As mentioned, the first respondent has been put on garden leave since the end of January 2019. If the application is heard in the ordinary course, the parties may only be in court in September/ October 2019, rendering the respondents’ opposition moot as the restraint of trade would have almost lived its course. In the interim, the first respondent would be precluded from taking up employment with the second respondent who is paying her remuneration. These circumstances render the urgency of the reconsideration application continuous.

[5] It is common cause that the first respondent was employed by the applicant as a credit clerk from June 2016 to October 2018. Her contract of employment includes a restraint of trade agreement. The first respondent resigned from the applicant’s employment to take up employment with the second respondent.

[6] The applicant alleges that the respondents concluded a contract of employment in the face of its restraint of trade agreement with the first respondent, thereby contravening it. The first respondent does not deny entering into a restraint of trade agreement with the applicant. However, both respondents deny contravening the restraint of trade agreement. They contend that the applicant has not established a prima facie right to enforce it. They submit that the restraint of trade agreement is not enforceable because:

[6.1] the second respondent is not in competition with the applicant.

[6.2] the applicant does not have a protectable interest worthy of protection.

[7] In the event that the court positively determines these two issues, the respondents further contend that applicant has not established that it stands to suffer imminent irreparable harm if the restraint of trade agreement is not enforced and that it enjoys the balance of convenience to have the restraint of trade agreement enforced in its favour.

[8] The applicant’s case has several inherent difficulties:

[8.1] in the correspondence that preceded the litigation, the respondents placed the competition between the applicant and the second respondent in dispute. Notwithstanding, the applicant did not address this issue in its founding affidavit, despite attaching the correspondence in which the respondents dispute the applicant’s assertion that the second respondent is its competitor. Consequently, the founding affidavit sets out no basis on which the applicant’s assertion that the second respondent is its competitor can be sustained.

[8.2] despite this pivotal omission by the applicant, in their answering affidavit, the respondents persisted in disputing that the two entities are competitors and went further to elaborate its basis for saying so. It names two non-exclusive suppliers who supply it, but contends that these suppliers do not supply the applicant but a different entity related to the applicant.

[8.3] according to the respondents, largely, the business of the applicant and the second respondent differ. The applicant is a manufacturer and distributor of overhead line products and special fasteners. It does not import its products. The second respondent is not a manufacturer. It sells complete products most of which it imports from China. The second respondent contends that only 10% of the applicant’s business overlaps with that of the second respondent, and only in respect of nuts and bolts, and that the overlapping products only consist of hex bolds, hex nuts, hex screws and fully threaded bars. This, the second respondent further contends, reduces the overlap to only 2% of the applicant’s business. The applicant conceded this narrow overlap only in reply. Further, the applicant does not contest its extent as contended by the respondents.

[8.4] in both its written and oral submissions, counsel for the applicant approached competition between the applicant and the second respondent as a common cause fact on the basis of the 2% overlap concession by the respondents.

[9] It is trite that an applicant may not make out their case in reply. Worse so, in this case, despite the respondents’ concession of the 2% overlap in respect of products supplied by two non-exclusive suppliers who supply an entity related to the applicant, it remains unclear why the applicant contends that the second respondent is its competitor. This vagueness in the applicant’s case is exacerbated by the fact that the restraint of trade agreement omits to define who a competitor is.

[10] It is common cause that the applicant and the second respondent do not compete for the same customers. On the respondent’s version, they also do not compete for the same suppliers.

[11] In the premises, the restraint of trade agreement does not come into effect. The applicant has failed to make out a case for its enforcement. Therefore the application stands to be dismissed with costs.

[12] The following order is made:

 

ORDER

1. The application is dismissed with costs.

 

 

 

                                                                                    ________________________

MADAM JUSTICE L T MODIBA

                                                      JUDGE OF THE HIGH COURT

                                           GAUTENG LOCAL DIVISION, JOHANNESBURG

 

 

Counsel for applicant: Advocate J Moorcroft

Attorney for applicant: C Bekker & Associates

Counsel for respondent: Advocate Y Peer

Attorney for respondent/s: Crawford & Associates Attorneys

Date heard: 22 March 2019

Date of judgment: 29 March 2019

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