---

SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document in compliance with the law and SAFLII Policy

IN THE HIGH COURT OF THE REPUBLIC OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

 

[1]    REPORTABLE: YES/NO

[2]    OF INTEREST TO OTHER JUDGES: YES/NO

[3]    REVISED

CASE NO: 26201/17

26/8/2019

 

In the matter between:

 

D[….] A[….] N[….]                                                                                          First Applicant

DRAKEMED SUPPLIES CC t/a DMS                                                         Second Applicant

 

and

 

W[….] A[….] N[….]                                                                                         First Respondent

DMS RADIOLOGY EQUIPMENT (PTY) LTD                                           Second Respondent

THE REGISTRAR OF CLOSE CORPORATIONS                                    Third Respondent

JUDGMENT

LOUW, J

[1]          The. first applicant and the first respondent were married to each other out of community of property on 23 September 1995. Two children, respectively aged 17 and 13 at the time the present application was launched in April 2017, were born of the marriage. The second applicant, Drakemed Medical Supplies CC, was registered in 1997 with the first applicant having a 40% membership interest and the first respondent 60%. It is common cause that the trading style of the second applicant is DMS, which is an acronym of its full name. The first applicant was involved in the administration of the business of the second applicant and the importation of various medical related products. The first respondent dealt exclusively with radiology related services.

[2]          The first applicant and the second applicant were divorced by order of this court on 22 April 2016, which order incorporated a settlement agreement between them. At the time they envisaged that they would continue operating the business of the second applicant as before, i.e. that the first respondent would continue performing radiology services and the first applicant the administration and importation of products. In terms of the settlement agreement, they would each hold a 50% membership interest in the second applicant.

[3]          The first applicant says in her founding affidavit that, in retrospect, it was naive for her to suppose that she and the first respondent could continue working together in a business relationship because it was apparent from the outset that the first respondent intended abdicating from his responsibilities towards the second applicant. The first respondent denies that he abdicated his responsibilities towards the second applicant and says that he would have continued to perform the radiology services had he received his monthly salary for that.

[4]          The first applicant alleges that the first respondent has to date only implemented one of his obligations in terms of the settlement agreement, namely to pay the amount of R500 075.00 in respect her undivided half share of the property situated at [….] which was to be transferred to the first respondent in terms of the settlement agreement. Instead, she says, the first respondent has sought to pressurise her into signing a new settlement agreement. She further says that, in the interim, the first respondent is deliberately breaching his fiduciary duties toward the second applicant by, inter alia, refusing to sign the annual financial statements of the second applicant which are required by ABSA Bank in order to renew the overdraft facility of the second applicant and that this has resulted in the bank threatening to call up the facility.

[5]        The first applicant further alleges that the respondents are actively undermining the business of the second applicant by competing unlawfully with it. She says that they have embarked on a concerted campaign to capture the clients and the goodwill which vests in the second applicant, inter alia by using the distinctive acronym DMS in relation to medical equipment supplies in order to create confusion and to use the goodwill of the second applicant to springboard the business of the second respondent. The second respondent was registered on 2 June 2016. A SearchWorks report annexed to the first applicant's founding affidavit indicates that the first respondent was appointed as one of the directors of the second respondent on 2 June 2016 and that he resigned as a director on the same date. This is not denied by the first respondent.

[6]          The first applicant alleges that the first respondent has committed the following wrongs:

•         He has deliberately sabotaged the business of the second applicant by passing off the business of the second respondent as that of the second applicant or being associated therewith.

•        He has fraudulently abused his control of the second applicant's website www.drakemed.co.za and its associated email address to divert potential customers to the second respondent

•        He has unlawfully competed with the second applicant by filching confidential information of the second applicant, including its database of customers, in order to entice customers away from the second applicant despite his fiduciary duties to the second applicant.

•        He has refused to hand over valuable equipment and motor vehicles that belong to the second applicant.

•        He has threatened the first applicant with criminal charges in order to force her to sign a new settlement agreement.

•        He has undermined the ability of the second applicant to pay the first applicant the amount of R1 630 558.00 in respect of rental for the premises [….]. In terms of clause 3.2 of the settlement agreement, the first respondent undertook to procure and ensure payment of this amount by the second applicant within seven days from date of signature of the agreement.

•        He refuses to pay any maintenance to the first applicant. In terms of clause 6.1 of the settlement agreement, the first respondent was to pay rehabilitative maintenance to the first applicant in the amount of R15 000.00 per month, subject to an annual escalation of 8%, to be commenced one year after the date of the divorce and thereafter annually on the same date until the plaintiff remarries or lives together as husband and wife in a cohabitation relationship.

•        He has only sporadically paid maintenance in respect of the minor children, the total of which amounts to R167 217.89.

 

The settlement agreement

[7]          On 5 July 2016, less than three months after the divorce, the first respondent wrote an email to the first applicant in which he said that the first applicant's initial plan was to start living and share all their responsibilities, but that they had done exactly the opposite. He further said that the only way forward was to do as they had planned in the beginning and attached what he referred to as a "proper contract" that would divide both their responsibilities fairly.

[8]          The first applicant denies that she ever accepted the amended settlement agreement. She points out that, in terms thereof, the parties would keep all the movable assets already in his or her possession, which implied that this would include the second applicant's property which the first respondent refuses to return. She also points out that the proposed amended agreement makes no mention of the outstanding rental of Rl,630,558.00 which the first respondent had to procure payment of by the second applicant. She also refers to the fact that the proposed settlement makes provision for payment of only R2 500.00 maintenance per child per month, whereas the settlement agreement sanctioned by the court provides for R10 000.00 per month per child, subject to an annual escalation. It also provides that the first respondent will only be responsible for 50°/o of the children's school fees and school- and sport clothing. It removes the first applicant's right to spousal maintenance. It further stipulates that the first respondent shall transfer his interest in the second applicant to the first applicant and that the first applicant shall release the first respondent from all obligations and securities for any debts of the second applicant, including from any banking institution and from any amounts owing to SARS in respect of income tax and VAT. Upon written confirmation from the various banking institutions that the first respondent has been released from debts, the first respondent shall pay to the first applicant an amount of RSOO 000.00 or half of the certified audited amount of debt, whichever is the smallest.

[9]          The first respondent states in his answering affidavit that he is dyslexic and that the first applicant's mother brought the settlement agreement for him to sign. He did not want to sign but the first applicant's mother insisted that he sign, saying that the first applicant did not love him anymore and that she wanted to get the divorce over and done with. He says that he was totally distraught, but that he signed the document on the insistence of the first applicant's mother. He trusted her and she assured him that there was nothing in the document that needed his attention. He did not read the document and signed it, whereafter the first applicant's mother took him to the sheriff where the summons was served on him. These allegations are denied by the first applicant in her replying affidavit. She attaches an affidavit by a police officer who confirms that the settlement agreement was signed by the first applicant and the first respondent in her presence and who states that they were both calm and collected at the time.

[10]       With regard to the amendment of the settlement agreement, the first respondent states in his answering affidavit that the first applicant did accept the amended settlement and that he made a recording, with the knowledge of the first applicant, of her acceptance thereof. He offered to make a copy of the recording available.

[11]       The first respondent subsequently, after the filing of the applicants' replying affidavit, deposed to a supplementary affidavit in which he states that he was contacted by the first applicant during July 2016 when it was agreed to meet in the Maxis restaurant to discuss the urgent payment of the amount of R500 000.00 as the first applicant was in need of financial assistance. He says that during the meeting he offered to pay the R500 000.00 to the first applicant if they were to restructure the settlement agreement and have an amended settlement agreement made an order of court. He says that the first applicant consented that the settlement agreement which had been made an order of court was not fair to both parties and that, if he were to pay her the R500 000.00, they would schedule a meeting with their respective attorneys to restructure and incorporate the terms which they agreed upon. He specifically asked her permission to make a recording on his cell phone in her own words, to which she agreed. He attaches a transcription of the recording to the affidavit, which reads as follows:

9

"D[…]             A[…] as jy my Vyfhonderd honderd(sic) duisend rand betaal dan gaan ek saam met jou na prokureurs toe en jy kan saamgaan.

A[….]              Wie praat nou?

D[….]              Dit is D[….] A[…] N[….] ID [….]

 

[12]       It is common cause that an amended settlement agreement was prepared by the respondents' attorney. On 13 October 2016, the respondent's attorney wrote a letter to the first applicant's attorney in which he said the following:

 

"In die egskeidings geding was daar reeds verskeie maande gelede 'n gewysigde skikkingsooreenkoms aan u klient voorgele vir oorweging wat ons tot op hede nog geen antwoord op ontvang het nie."

 

[13]       The first defendant states in his answering affidavit that on 7 November 2016 he and the first applicant agreed on a new settlement which he says is evident from the correspondence annexed to the first applicant's founding affidavit as annexure "FAl7". Annexure "FA17" consists of a letter written by the first respondent's attorney to the first applicant's attorney on 7 November 2016, stating that the parties had, seemingly, resolved some of the issues applicable. A copy of an email sent by the first respondent to the first applicant on the same date is annexed to the letter. The relevant part thereof reads as follows:

 

"As per our conversation 2016-11-07, please reply for confirmation and acceptance.

1.                 Below is proof of the lawyer busy with the transport (sic). You will be required to sign final documents of sale. (Verbal confirmation 2-3 weeks with Charlene Sanders). Her contact details below.

2.                 All current legal proceedings against myself and/or DMS Radiology (Pty) Ltd will be stopped.

3.                 On payment a revised divorce settlement will be reached between ourselves and as discussed R2,500.00 per child and a shared cost for school and extramural activities with agreed upon and prior shared consultation by ourselves. Any other requests as per the current divorce settlement agreement shall become null and void and shall be legally done in a court of law."

 

The first respondent states that he sent the email to the first applicant as a formality of what they had discussed in order to get her confirmation and acceptance in writing . He says that she, however, appears to have had a change of heart after they reached the new settlement and he made the payment of R500 000.00 to her.

[14]      The first applicant denies in her replying affidavit that a new settlement was agreed upon on 7 November 2016. She filed a supplementary affidavit in answer to the first respondent's supplementary affidavit in which she says the contents of the first respondent's supplementary affidavit are false. She denies that she contacted the first respondent during July 2016 and denies that she met the first respondent at the Maxis restaurant to discuss the urgent payment of R500,000.00 as she was in need of financial assistance. She says that the payment of R500,000.00 was long overdue in terms of the settlement agreement. She disputes that the payment was conditional upon the settlement agreement being amended. What was agreed, she says, was that the first respondent would pay the amount of RS00,000.00 which was owing in terms of the settlement agreement, and that any further discussions about the settlement agreement would be conducted through their respective lawyers. She emphasises that no agreement was reached about the amendment of the settlement agreement. With regard to the recording, she confirms that she consented to the recording of the conversation, but says that the first respondent dishonestly misrepresents to the court that the only recorded portion is that which is referred to above.

[15] It was submitted on behalf of the first applicant that the evidence of the first respondent was false because the first respondent gave two versions about when the agreement to amend the settlement agreement was concluded, namely during July 2016 and on 7 November 2016. It was therefore submitted that the evidence of the first respondent could and should be rejected. The submission that the first respondent gave two versions of when the agreement to amend was concluded, is, on my understanding of the first respondent's evidence, based on a misunderstanding of his evidence. His evidence is that an agreement to amend was concluded during July 2016 and that a new agreement to amend was concluded on 7 November 2016.

[16]      The factual dispute about whether or not the parties agreed to amend the settlement agreement cannot be resolved on the affidavits before court. This issue will therefore be referred to trial in terms of Rule 6(5)(g) for adjudication together with the further issues referred to in paragraphs 35 and 41 below.

 

Unlawful competition and passing off

[17]       South African law recognises the generic delict of unlawful competition, based on the lex Aquilia, which can manifest itself in a variety of forms, one of which is passing off. In Capital Estate & General Agencies (Pty) Ltd v Holiday Inns Inc,[1] Rabie JA said the following at 929C:

 

"The wrong known as passing off consists of a representation by one person that his business (or merchandise, as the case may be) is that of another, or that it is associated with that of another, and, in order to determine whether a representation amounts to a passing off, one inquires whether there is a reasonable likelihood that members of the public may be confused into believing that the business of the one is, or is connected with, that of another."

[18]       The essence of an action for passing off is to protect a business against a misrepresentation by someone that the business, goods or services of the representer is that of the plaintiff or is associated therewith. The plaintiff must establish a goodwill or reputation attached to the goods or services which is present in the minds of the purchasing public by association with the identifying get-up (whether it consists simply of a brand name or a trade description, or the individual features of labelling and packaging under which his particular goods or services are offered to the public), such that the get-up is recognised by the public as distinctive specifically of the plaintiffs' goods or services.[2]

[19]       It is common cause that the second applicant has used the acronym 'DMS' for a substantial period of time and that the second applicant has an established goodwill and reputation which adheres to the DMS. The second respondent was registered on 2 June 2016 with the name DMS Radiology Equipment (Pty Ltd. Copies of a brochure published by the second respondent, a calendar which the second respondent had printed for distribution among its clients, and business cards of the second respondent, all of which reflect the letters DMS, are annexed to the applicants' founding affidavit as proof of the first and second respondents' use of DMS. The letters also appear prominently on the second respondent's delivery vehicle which can be seen on the photograph of the vehicle that is attached to the applicants' founding affidavit. The first respondent does not dispute that the second respondent uses the first applicant's acronym "DMS' for its business which it describes as "medical equipment suppliers and services". He attempts to justify the use by saying that the font used by the second respondent is different to that used by the second applicant and by referring to the letters DMS also being used by 84 other registered entities as appears from a search that was done at CIPRO, a copy of which a copy is attached to the answering affidavit. Not one of the listed entities however appears to be suppliers of medical equipment or services.

[20]       There can be little doubt that the choice of the second respondent's name which incorporates the letters DMS and the use by it of the letters DMS was intended to convey to potential customers that its business was that of the first applicant or was associated with it. The first respondent has offered no explanation for its use by the second applicant of the second applicant's acronym DMS.

[21]       Evidence of actual deception or confusion is not necessary. It is the potential of such confusion which is relevant. The potential of confusion or deception in the minds of clients or potential clients as a result of the respondents' use of DMS, is manifest. The applicants have also provided evidence of actual confusion or deception. One instance to which the first applicant refers is where services were rendered by the second respondent to a Dr. Grabler, who in turn mistakenly paid the second applicant in the belief that the second applicant had rendered the relevant services. A similar situation arose with a Dr. de Jager.

[22]       The applicants rely on further instances of alleged unlawful competition. As a general rule, a person is entitled freely to carry on his trade or business in competition with his rivals. But the competition must remain within lawful bounds. If it is carried on unlawfully, in the sense that it involves a wrongful interference with another's rights as a trader, that constitutes an injuria for which the Aquilian action lies if it has directly resulted in loss.[3] The norm to be applied when considering whether conduct constitutes unlawful competition, is the objective one of public policy. This is the general sense of justice of the community, the boni mores,[4] which must be interpreted by the policy-makers of the community such as its legislators and judges.[5]

[23]       The applicants allege that the first respondent is causing the second respondent to compete unlawfully with the second applicant by manipulating the second applicant's website which is still controlled by the first respondent. The first respondent holds the website password and according to the website administrators, only he is authorised to make changes thereto . The first applicant has unsuccessfully attempted to assert control over the website despite the fact that the second applicant is paying the monthly fee to the website host. In 2016, both the second applicant's website, www.drakemed.co.za, and the second respondent's website, www.dmsmed.co.za, distinctly reflected the DMS logo. On 1 November 2016, the applicants' attorney addressed a letter to the respondents' attorney complaining of the use of DMS on the second respondent's website. The first respondent responded by removing the DMS logo from the second applicant's website instead of from the second respondent's website.

[24]       The first applicant states in her founding affidavit that the first respondent has also manipulated the second applicant's website in order to divert custom from the second applicant. She referred in this regard to a Dr. Ferreira who intended doing business with the second applicant and who went to the second applicant's website which has a 'contact us' icon on it. Dr. Ferreira then submitted a request for a quote for an x-ray unit. Dr. Ferreira confirms that he then received an answer from the second respondent on 30 January 2017 which reflects the second respondent's email address, sales@dms.co.za. The first applicant states in her replying affidavit that, subsequent to the revelations in her founding affidavit, the first respondent has disabled the second applicant's website and reduced it to what she calls a shell. Screenshots of the website are annexed to the replying affidavit.

[25]       The applicants further allege that the respondents are competing unlawfully with the second applicant by using the second applicant's email address, drakemed@worldonline.co.za, to divert customers of the second applicant to the second respondent. The applicants refer in this regard to an inquiry made by Dr. EA van Nleuwenhuizen to this email address on 25 in January 2017, which was responded to by Ms. Chantelle Terry, a former employee of the second applicant who is now employed by the second respondent, from an email address used by the second respondent, sales@dmsmed.co.za. The first respondent does not deny these allegations, but states that, to the best of his knowledge, the email address is registered in his name and was his first private and business address. He does not, however, deny that it is the email address used by the second applicant.

[26]       The first respondent's conduct described above constitutes a serious and wrongful interference with the second applicant's rights as a trader. It is something which, in my view, the general sense of justice of the community will not tolerate and is therefore unlawful.

 

Breach of fiduciary duties

[27]       Section 42(1) of the Close Corporations Act 69 of 1984 provides that each member of a close corporation shall stand in a fiduciary relationship to the corporation. Section 42(2)(b) provides that a member shall avoid any material conflict between his or her own interests and those of the corporation, and in particular, in terms of subsection (iii) thereof, shall not compete in any way with the corporation in its business activities.

[28]      The first applicant states that the first respondent is deliberately breaching his fiduciary duties towards the second applicant by actively contriving to undermine the business of the second applicant by competing unlawfully with it, by embarking on a campaign to capture the second applicant's clients and the goodwill which vests in the second applicant and by diverting the second applicant's customers from the second applicant's website. All of this is abundantly clear from what has been set out above. He even went so far as to launch an application for the second applicant to be placed under business rescue.

[29]       The first respondent says that the second applicant and the second respondent do not compete with each other. This is patently not true. It is apparent from a printout of the second respondent's website that it advertises products and services which are also offered by the second applicant. The first respondent does not deny that such products and services are advertised on its website. He simply denies that the second respondent competes with the second applicant and says that the second respondent conducts business in the manufacturing and selling of bacterial filters.

[30]       The first applicant further states that amongst the property taken by the first respondent when he departed from the second applicant, was Firefly products worth about R40 000.00 for which the second applicant paid and which included octoscopes. The first respondent's response is that Firefly gave him permission to sell its video scopes. This evidence contradicts his evidence that the second applicant only manufactures and sells bacterial filters and confirms that the second respondent is selling a product supplied by one of the second applicant's suppliers.

[31]       The first applicant further refers to the evidence of a Dr. James Davies who states that he was contacted by a marketing representative of the second respondent to market their portfolio of equipment and services, including those offered by the second applicant. Dr. Davies, who is a partner of the first applicant's mother, was aware of the dispute between the first applicant and the second respondent, and he challenged the marketing representative about the ethics of this marketing campaign. The lady representative then refused provide a telephone number where she could be contacted. This evidence is not denied by the first respondent.

[32]       The evidence of the first respondent that the second respondent is not competing with the second applicant can safely be rejected. The first respondent is clearly disregarding his fiduciary duties to the second applicant in contravention of the provisions of s 42 of the Close Corporations Act.

[33]       Section 36(1)(b) of the Act provides that on application by any member of a corporation, a court may order that any member shall cease to be a member of the corporation if that member has been guilty of such conduct as taking into account the nature of the corporation's business, is likely to have a prejudicial effect on the carrying on of the business. In terms of s 36(1)(c), a court may order that a member shall cease to be a member if that member so conducts himself or herself in matters relating to the corporation's business that it is not reasonably practicable for the other member or members to carry on the business of the corporation with him or her. Section 36(1)(d) furthermore empowers the court to order that a member shall cease to be a member if circumstances have arisen which render it just and equitable that such member should cease to be a member of the corporation.

[34]       This is clearly a case where the court could and should exercise its discretion in terms of each or all of the subsections of section 36(1) referred to above to order that the first respondent shall cease to be a member of the second applicant. It follows that the first applicant will thereupon, as the only remaining member of the second applicant, be entitled to take all action and sign all documentation as may be required in the conduct of the second applicant's business, including to sign the annual financial statements of the second applicant for the financial year ending 2016 and subsequent financial years, which is the further relief which the first applicant claims. The reason why the first applicant specifically requires authorisation to sign the 2016 annual financial statements is because the first respondent has refused to sign them. The first respondent says that the reason why he has refused to sign the 2016 financial statements, is because the first applicant forged his signature to obtain an increase in the second applicant's overdraft facility from ABSA Bank. This is denied by the first applicant. This issue becomes moot if the first respondent ceases to be a member of the second applicant. It further follows that, upon termination of the first respondent's membership of the second applicant, the first applicant will be entitled to the relief sought in paragraph 6 of the notice of motion that she be authorised to institute proceedings on behalf of the second applicant against the first respondent and the second respondent for damages arising out of unlawful competition, breach of confidential information, passing-off and breach of fiduciary duties.

[35]       In terms of s 36(2) of the Act, a court granting an order in terms whereof a member of a corporation ceases to be a member thereof, may make such further orders as it deems fit in regard to the acquisition of the member's interest concerned or the amounts, if any, to be paid in respect of such member's interest or the claims against the corporation of that member, the manner and times of such payments and the persons to whom they shall be made. These are issues which cannot be dealt with in the present application and should be dealt with in the action to be instituted by the applicants as contemplated in their notice of motion.

 

Vindicatory relief

[36]       The first applicant alleges that during about mid May 2016, the first respondent removed the bulk of the second applicant's movable property, including the entire computer system which comprised the server for the network and the database used by the second applicant. She says that the database is the central repository of information that is automatically updated with information entered on other computer terminals, for instance relating to account payments, products, services and the like. As such, it was the central hub of the second applicant's information technology system, and contained confidential information such as client contact details, their needs and requirements, key personnel and pricing structures of the second applicant. The relief sought in paragraph 3.4 of the applicants' notice of motion, is for an order directing the first respondent to return all so ware containing the customer lists or billing information which was removed from the second applicant.

[37]       The first respondent's response regarding the database is that it was developed by him and loaned to the second applicant for use without any remuneration and that it was never the property of the second applicant. He confirms that the second respondent is in possession of the full database and says that the applicants have full access thereto .

[38]       The first applicant states in the replying affidavit that the software concerned was developed by the first respondent in his capacity as an employee of the second applicant, and that no agreement was ever entered into in respect thereof. Section 21(1)(d) of the Copyright Act 98 of 1978 provides that, if a computer program is made in the course of the author's employment by another person under a contract of service, that other person shall be the owner of the copyright which subsists in the computer program.

[39]       It is not possible to determine on the affidavit evidence what the circumstances were under which the first respondent developed the software, i.e. whether or not it was developed by him in his capacity as an employee of the second applicant. It is, however, not necessary to make any finding in this regard as the first applicant has, through his attorneys in their letter dated 18 May 2016, offered to return the computer system to the second applicant.

[40]      In prayer 5 of their notice of motion, the applicants seek an order directing the first and second respondents to forthwith deliver to the first applicant on behalf of the second applicant the property allegedly belonging to the second applicant as described in annexure 'X' to the notice of motion. There was no annexure 'X' attached to the notice of motion, but after close of argument I was provided with the following list of the property by applicants' counsel in the presence of respondent's counsel:

1.         Two forklifts referred to in paragraph 26.3.1 of the founding affidavit.

2.         Equipment to conduct Q and A tests as identified in paragraph 26.3.3 of the founding affidavit.

3.         The computer system including databases installed, as described in paragraph 26.3.4 of the founding affidavit and in annexure FA 70.

4.         Computer program to perform lung function tests as referred to in paragraph 26.3.6 of the founding affidavit.

5.         30 printer referred to in paragraph 26.3.8 and annexure RA10.

 

[41]     Save for the computer system, all the items on the list are disputed by the first respondent who claims ownership thereof for various reasons. Again, it is not possible to resolve this factual dispute in the present proceedings. The dispute must therefore also be referred to trial.

 

Contempt of court

[42]     The settlement agreement sanctioned by the court provides for payment of maintenance to the first applicant in the amount of R15 000.00 from month, subject to an annual escalation of 8% to be commenced with one year after the date of divorce and thereafter annually on the same date until the first applicant remarries or lives together as husband and wife in a cohabitation relationship. The first applicant alleges that the first respondent has to date refused to pay any maintenance to her.

[43]     The settlement agreement further provides the first respondent shall pay maintenance to the first applicant for the two minor children in the amount of R10 000.00 per month per child, which amount shall be subject to an annual escalation of 8% to be commenced with one year of the date of divorce and annually thereafter on the same date until the children become self-supporting. The first applicant states that the first respondent has sporadically paid maintenance in respect of the children in the amounts set out in an annexure to the founding affidavit.

[44]     The first respondent does not deny that he has failed to pay the maintenance ordered by the court as alleged by the first applicant. He says that the first applicant knows very well what his financial position is and that he cannot afford the payments provided for in the settlement agreement.

[45]     It is therefore common cause that the first respondent is in contempt of the existing court order. A court order stands until it is set aside by a court of competent jurisdiction.[6] It must be obeyed until it is set aside. It may not be ignored.[7]

[46]       The first applicant applies for an order that a sentence of 90 days imprisonment, or such alternative sentence as the court may deem just, be imposed on the first respondent, but that such sentence be suspended on condition that the first respondent remedies his breach of the settlement agreement by commencing payment of the maintenance due in respect of the first applicant and the minor children, duly escalated, in terms of the settlement agreement and by making payment in respect of all arrear maintenance in respect of the first applicant and the minor children within 90 days of the court's order. The first respondent should, however, be afforded the opportunity to show cause why a term of imprisonment should not be imposed if he fails to commence payment of the maintenance which he has been ordered to pay and fails to pay all arrear maintenance within 90 days from the date of the order. Such an order will be made.

 

SANAS

[45]      The applicants alleges that the second respondent is conducting radiology services using the second applicant's registration number 'X-Ray 0006' with the South African National Accreditation System and seeks a declaratory order that the second respondent's use of the SANAS accreditation number is unlawful.

[46]      The first respondent says in his answering affidavit that it was agreed between him and the first applicant that the services rendered by the second respondent would be rendered on the accreditation number of the second applicant until the second respondent was issued with an accreditation which, he says, was subsequently issued under accreditation number 'X-Ray 0022'. Although the first applicant disputes the alleged agreement in her replying affidavit, she does not deny that the second respondent has been issued with its own accreditation number. The issue is therefore also moot.

 

Costs

[47]      The applicants seek an order that the first and second respondents pay the costs of the application on the attorney and client scale, jointly and severally. In my view, a punitive costs order is fully justified in view of the first respondent's unconscionable conduct to which I have referred.

 

Order

In the result, I make the following orders:

1.        It is ordered that the first respondent ceases to be a member of the second applicant as from the date of this order.

2.        The first applicant is authorised to take all action and sign all documentation as may be required in the conduct of the second applicant's business, including to sign the annual financial statements of the second applicant for the financial year ending 2016 and subsequent financial years on behalf of the second applicant and, in so far as may be necessary, on behalf of the first respondent, and to submit same to ABSA Bank Limited on behalf of the second applicant.

3.        The respondents are interdicted and prohibited from passing off the business of the second respondent as that of the second applicant or as being associated with it by using the letters 'DMS'.

4.        The respondents are interdicted and prohibited from competing unlawfully with the second applicant:

4.1        by diverting customers of the second applicant who make trade inquiries at the second applicant's website www.drakemed.co.za;

4.2        by diverting customers making inquiries at the email address drakemed@worldonline.co.za.

 

5.        The first respondent is ordered to sign all documentation necessary to vest control of the aforesaid website and email address in the applicants.

6.        The first applicant is authorised in terms of s 36(2)(c) of the Close Corporations Act 69 of 1984 to institute proceedings on behalf of the second applicant against the respondents for damages arising out of unlawful competition, breach of confidential information, passing off and breach of fiduciary duties

7.        The first respondent is ordered to return to the applicants the computer system described in paragraph 26.3.4 of the applicants' founding affidavit and in annexure FA70 thereto including all data bases containing the customer lists or billing information of the second applicant.

8.        The first respondent is declared to be in contempt of the court order incorporating the settlement agreement under case no. 18348/2016 granted by Hughes J on 22 April 2016.

9.        The first respondent is ordered:

9.1        to commence payment of the maintenance due in respect of the first applicant and their two minor children, duly escalated, as provided for in the said settlement agreement;

9.2        to make payment of all arrear maintenance due in respect of the first applicant and their two minor children in terms of the said settlement agreement within 90 days of the date of this order,

 

failing which the first respondent is ordered to show cause on a date to be determined by the Registrar, on application by the first applicant, why he should not be committed to prison for 90 days or such other period as the court may determine.

 

10.         The issues referred to in paragraphs 16, 35 and 41 of this judgment are referred to trial with the following directions:

10.1    The applicants' founding affidavit shall stand as a simple summons and the respondents' answering affidavit shall stand as a notice of intention to defend.

10.2    The applicants shall serve and file their declaration within 20 days of the date of this order, whereafter the Uniform Rules of Court shall apply.

 

11.         The first and second respondents are ordered, jointly and severally, to pay the applicants' costs on the attorney and client scale.

 

 

 

 

Counsel for applicants: Adv. SW Davies.

Instructed by: J W Wessels & Partners Inc, Pretoria.

 

Counsel for first and second respondents: Adv. J G Blignaut.

Instructed by: Taute, Bouwer and Cilliers Inc, Pretoria

---