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

 

Not reportable

THE LABOUR COURT OF SOUTH AFRICA, HELD AT CAPE TOWN

Case: C108/2021

In the matter between:

TRANSPET CC t/a PETPORT SOUTH AFRICA	First Applicant
and
LOUISE BENJAMIN ID NO: 900[…]	First Respondent
SOUTH AFRICA RELOCATIONS CC REGISTRATON NO: 2018/263806/07	Second Respondent

Date of Hearing: 13 May 2021

Date of Judgment:

This judgment was handed down electronically by circulation to the parties’ legal representatives by email, publication on the Labour Court website and release to SAFLII. The date and time for handing down judgment is deemed to be 10h00 on 20 May 2021.

Summary: (Urgent application- Restraint of Trade – Confidentiality – Undertaken given – No provision in agreement prohibiting work for a competitor – wholistic interpretation of agreement not a licence for court to import terms – no tacit or implied terms pleaded in any event – no breaches of agreement established)

JUDGMENT

LAGRANGE J

Introduction

[1]       The applicant (‘Transpet’) has launched an urgent application for final relief, which is summarised as follows. Firstly, Transpet seeks to restrain the first respondent, Ms L Benjamin (‘Benjamin’) from:

1.1        interfering with, soliciting the custom of, or enticing away from, Transpet employees, suppliers or customers of Transpet;

1.2        whether for her own benefit, or that of third party, interfering with, soliciting the custom of, or enticing away from, Transpet any supplier or customer whom she conducted business with whilst working for Transpet or 12 months prior to her employment by Transpet, or with whom she entered into negotiations with a view to conducting the business with them during her employment by Transpet without prior written approval from Transpet;

1.3        either indefinitely, or for a period of 24 months after the termination of her service with Transpet, furnishing any information or advice to any of Transpet, or use any other means designed to result in such a party terminating its association with Transpet and transferring its business to a third party;

1.4        soliciting the custom, interfering with, or endeavouring to entice from Transpet, any client, supplier or customer with whom Transpet had conducted business for a period of 12 months prior to the termination of her service with Transpet or with whom she had entered into negotiations with a view to conducting business with that customer, and

1.5        “being employed, engaged or financially interested in any business whether having an indirect financial interest or otherwise, or giving advice or assistance for award in casual kind.”

[2]       Secondly, Transpet wants an order interdicting and restraining Benjamin from:

2.1        disclosing or divulging Transpet’s confidential information and know- how, directly or indirectly to any third party, including information about directors, customers, shareholders, employees or persons with whom Benjamin dealt in the course of her duties for Transpet, and

2.2        exploiting any such confidential information or know how, or causing it to be exploited.

[3]       Transpet also asked for costs on a punitive scale.

[4]       The application was launched on 3 March 2021 and called upon Benjamin to file her answering affidavit by 10 March 2021. It was first enrolled for hearing on 18 March 2021, but was postponed on that occasion and again on 22 April 2021.

[5]       Costs were reserved on both occasions. Transpet also brought an interlocutory application to join the second respondent [‘SA Relocations’] which is unopposed. Benjamin then filed a rejoinder to deal with new allegations in the replying affidavit, without obtaining leave to file the application. Transpet, in turn, objected to Benjamin’s rejoinder and filed its own surrejoinder. Nonetheless, on the court’s suggestion at the hearing of the application, all the affidavits filed were admitted by agreement.

Brief narrative

[6]       Benjamin was employed by Transpet in July 2020 as an export travel consultant earning R 13,500 per month. Transpet’s business is the relocation of clients’ pets from one country to another, which involves amongst other things sourcing suppliers providing air transport, animal housing equipment, veterinary services and the like. It also entails acquiring a knowledge of regulations governing the transport of domestic pace to other jurisdictions and how to obtain the necessary services to care for the animals while in transit or quarantine.

[7]       In October 2020, Benjamin and Transpet concluded an agreement entitled ‘Restraint of Trade and Confidentiality Agreement’ [‘the agreement’]. Essentially, clause 2 of the agreement headed ‘Confidentiality and Restraints’ requires Benjamin to comply with the obligations summarised in paragraphs 1.1 to 1.4 [inclusive] and 2 above. All of these obligations concern the preservation of the confidential nature of information about Transpet’s business acquired by Benjamin in the course of her employment by Transpet.

[8]       Although the agreement does include definitions of what it means to be “involved in relation to any business”, a “competitor” and “the Republic”, none of the operative provisions of the agreement imposing obligations on Benjamin make any reference to these terms. Moreover, there is no clause in the agreement expressly preventing Benjamin from taking up employment with, or otherwise being involved with the business of a competitor. Still less is there any provision stated as widely as the relief mentioined in paragraph 1.5 above.

[9]       The 8 February 2021, Benjamin did not come to work and early that evening sent an email to the owner of Transpet, Ms H Imrie (‘Imrie’), purporting to resign with immediate effect in order to pursue what she felt was ‘best for herself moving forward’, without specifying quite what that was. Transpet accepted the resignation, but on the assumption that Benjamin would still work her two weeks’ notice ending on 22 February 2021.

[10]    Transpet claims alleges that the following day it discovered that Benjamin had ‘tampered’ with her computer, and warned that it was being analysed by IT experts to determine what information was allegedly removed. In the founding affidavit, Transpet extrapolated from what it believed at that stage to infer and submit that Benjamin had copied the entire content of the computer’s hard drive and there after wiped it clean to cover her traces. Thus, it argued that it had a reasonable apprehension that she had copied confidential information for an ulterior purpose. Benjamin in her answering affidavit denied tampering with the computer all copying or deleting any of the proprietary information of Transpet on the computer. She does admit deleting her personal files as well as an airline template which had been provided to her as a pet relocation consultant, which was used for populating the details of each page relocation. In any event, the form was available online and is usually distributed by booking agents and is not part of Transpet’s proprietary information.

[11]    In its replying affidavit Transpet went into greater detail about what it believed was evidence of Benjamin removing proprietary information from the computer. In support thereof, copies of screenshots which were mostly unreadable were attached. In her rejoinder, Benjamin deals with each of the allegations. In summary, she claims that the information she had deleted was personal information in the form of her personal documents, including a record of her commissions, and emails. She admits removing her login details to access Bidair and her details to access the members’ section of the IPATA site, which were used by her while working for Transpet, but denies accessing the members’ section of the site since leaving Transpet. As she understood it, the computer would be given to another consultant and she wanted to remove items related to her use of the computer. Transpet retorts that the deletion of the Bidair logon details entailed the removal of proprietary information and claims there is no way of knowing if Benjamin had accessed the members’ section of the IPATA site using the login details she used while working for it.

[12]    In its replying affidavit Transpet identified a further item in the possession of Benjamin, which it suspected contained its proprietary information, namely a “colourful diary” in which Benjamin allegedly contained all Transpet’s pertinent information, and which she had not returned to Transpet. In retort, Benjamin states that any confidential information she had was in an A5 book, which she handed back to Transpet on 8 February and had offered to make the diary available to Transpet. In a series of WhatsApp exchanges between Imrie and it is apparent that Benjamin did return a book, but had Imrie complained it was not the correct one. Benjamin replied that she had a binder which was her normal diary binder and that she was willing to provide Imrie with the January and February inserts, but the rest of the diary contained personal information and personal budgets. Following this response, Imrie did not take the matter of the diary any further.

[13]    On 18 February, Transpet claims that an email came to its attention which showed that Benjamin was intending to provide a quotation to an existing client of Transpet, which it surmised was clear evidence of attempted enticement of the client by Benjamin in contravention of the agreement. As it appears from the email attached to Benjamin’s answering affidavit, it was the client who approached her for assistance via SA Relocations. Benjamin denies knowing that the individual was Transpet’s client and contends that it is common practice for customers to ‘shop around’ for different quotes. Transpet points out that Benjamin’s response to the enquiry using her new email address at SA Relocations welcomed the inquiry and invited the client to engage further with her regarding his requirements, which it argues clearly amounted to her enticing the client’s custom with its competitor.

[14]    The last alleged breach of the agreement raised by Transpet was based on information which came to its attention very shortly before the second enrolment of the application on 22 April 2021. In consequence of receiving information, Transpet applied for a postponement of the application and for permission to file a further affidavit dealing with this latest alleged breach of the agreement by Benjamin. On 20 April 2021 Transpet claimed it had learnt that another former employee, Ms Willis (‘Willis’), who had resigned on 5 March 2021 had also been employed by SA Relocations and that, prior to Willis’s resignation, she had interacted with Benjamin at a social event, which took place when Benjamin had just started working for SA Relocations. Benjamin denied encouraging Willis to join SA Relocations. She admitted that, at the event in question, she had been approached by Willis who asked her if SA relocations was hiring staff and she replied that to the best of her knowledge it was. Willis forwarded her CV to Benjamin who forwarded it to the relevant person at SA Relocations. She denies enticing or soliciting Willis to work for SA relocations.

Merits

[15]    Although the issue of urgency was still left for determination, Benjamin did not pursue the issue at the hearing of the matter, and by the time the matter was heard, both parties had more than amply ventilated their respective cases. Given the fact that restraint of trade applications launched sufficiently soon after any alleged breach are generally regarded as urgent, I am inclined to accept that the matter be dealt with as one of urgency.

[16]    The existence of the agreement and its binding status on Benjamin is not in dispute.

Alleged breaches of the agreement

[17]    In relation to the alleged removal of confidential information of Transpet from the computer used by Benjamin, there was no clear evidence of Benjamin having tampered with the computer and wilfully destroying data. Benjamin’s claim that she deleted her personal emails and the logon details she used to access an airline website and the member’s section of a website catering for the pet transport industry, on the understanding that the computer would be given to another consultant is not far-fetched or implausible. Further, evidence of her retaining proprietary information of Transpet itself, is largely based on speculative extrapolation by Transpet.

[18]    On the question of Benjamin soliciting business from a client of Transpet, it is clear that Benjamin did not initiate communications with Transpet’s client but was responding to an enquiry referred to her via SA Relocations. Moreover, she did not know the individual was a client of Transpet. There is no evidence that Benjamin’s actions in this regard amounted to her trying to attract a former client of Transpet to do business with SA Relocations. It is intrinsic to the act of seeking to solicit former clients of Transpet that this ought to have entailed Benjamin on her own initiative targetting one or more of them as individuals or as a group, whether directly or indirectly, to lure them away from Transpet. This did not occur.

[19]    Did Benjamin, directly or indirectly, endeavour to entice Willis away from Transpet? Like solicitation, enticement entails the enticing party taking some active step to try and attract the subject of enticement to participate in some activity, in this case taking a job with SA Relocations. The verb ‘entice’ means either to provoke something, in the sense of incitement or, as it applies to this context, to “persuade or attract by the offer of pleasure or some advantage”.[1] In this case, the only direct evidence of the contact between Benjamin and Willis is that on 8 February, Willis approached Benjamin who said she was looking for a new job and Benjamin mentioned to her that as far as she knew SA Relocations was intending to hire more consultants. Willis then took the next step of forwarding her CV to Benjamin who forwarded it to the relevant person at SA Relocations. It may be that Benjamin facilitated Willis’s employment enquiry and that the timing of the communication between them may be suspicious. However, on the direct evidence before the court, the initiative came from Willis and there is no evidence of an act of persuasion by Benjamin or of her portraying any supposed attractions of working for SA Relocations to Willis in an attempt to get her to work for it.

[20]    Benjamin‘s responses to the alleged breaches, which are not mere bald denials, are not fanciful or inherently implausible. It must also be said that Transpet did not lay a substantial evidentiary basis for Benjamin being in possession of proprietary information in the form of digital or hard copy data. in the circumstances, I am not satisfied that Transpet has established that Benjamin breached the agreement in the above respects.

[21]    Additionally Transpet also contends that, by going to work for SA Relocations, an undisputed competitor, Benjamin also breached the agreement. Mr Aggenbach valiantly argued that the restraint against working for a competitor was a logical part of the agreement read as a whole, even though it contained no express prohibition against working for one. Essentially, his argument ran along the following lines.

[22]    Firstly, Transpet argued that the protection of Transpet’s proprietary confidential information could not be assured if Benjamin was working for SA relocations. In this regard reference was made to authorities such as BHT Water Treatment (Pty) Ltd v Leslie and Another 1993 (1) SA 47 (W) and Reddy v Siemens Telecommunications (Pty) Ltd 2007 (2) SA 486 (SCA), which followed Reddy, viz.:

‘[20] … I agree with the remarks of Marais J in BHT Water:

'In my view, all that the applicant can do is to show that there is secret information to which the respondent had access, and which in theory the first respondent could transmit to the second respondent should he desire to do so. The very purpose of the restraint agreement was that the applicant did not wish to have to rely on the bona fides or lack of retained knowledge on the part of the first respondent, of the secret formulae. In my view, it cannot be unreasonable for the applicant in these circumstances to enforce the bargain it has exacted to protect itself. Indeed, the very ratio underlying the bargain was that the applicant should not have to content itself with crossing its fingers and hoping that the first respondent would act honourably or abide by the undertakings he has given      In my view, an ex-employee bound by a

restraint, the purpose of which is to protect the existing confidential information of his former employer, cannot defeat an application to enforce such a restraint by giving an undertaking that he will not divulge the information if he is allowed, contrary to the restraint, to enter the employment of a competitor of the applicant. Nor, in my view, can the ex-employee defeat the restraint by saying that he does not remember the confidential information to which it is common cause that he has had access. This would be the more so where the ex-employee, as is the case here, has already breached the terms of the restraint by entering the services of a competitor”[2]

[23]    However, in both cases mentioned the employee was prohibited under the express written terms of the relevant restraint agreement from being involved in any capacity with a competitor’s business.[3] It is true that the definitions of terms in the agreement mentioned in paragraph [8] above contain tantalizing hints, but no more, that the agreement might have been intended to be drafted with a provision restricting Benjamin’s post termination employment by a competitor. Mr Aggenbach also alluded to references in clauses 2.3 and 2.4 of the agreement in which Benjamin is prevented from soliciting custom or enticing trade connections of Transpet for the benefit of any third party, and furnishing any communication intended to result in that party transferring its relationship with Transpet to a third party. However, the presence of the disembodied definitions are equally compatible with a pro forma agreement in which such a prohibition was removed without removing associated definitions. Further, the anti- solicitation and anti-enticement provisions of the agreement are quite capable of being enforced as self-standing provisions, irrespective of Benjamin being employed by a competitor, even if it would be easier to do so if she were not so employed.

[24]    In contending that the interpretation of the agreement as a whole could only be read as to include a restriction on employment by a competitor, reliance was placed on the judgment in KPMG Chartered Accountants (SA) v Securefin Ltd and Another 2009 (4) SA 399 (SCA), in which the SCA held:

“[39] First, the integration (or parol evidence) rule remains part of our law. However, it is frequently ignored by practitioners and seldom enforced by trial courts. If a document was intended to provide a complete memorial of a jural act, extrinsic evidence may not contradict, add to or modify its meaning (Johnson v Leal 1980 (3) SA 927 (A) at 943B). Second, interpretation is a matter of law and not of fact and, accordingly, interpretation is a matter for the court and not for witnesses (or, as said in common-law jurisprudence, it is not a jury question: Hodge M Malek (ed) Phipson on Evidence (16 ed 2005) paras 33 - 64). Third, the rules about admissibility of evidence in this regard do not depend on the nature of the document, whether statute, contract or patent (Johnson & Johnson (Pty) Ltd v Kimberly-Clark Corporation and Kimberly-Clark of South Africa (Pty) Ltd 1985 BP 126

(A)   ([1985] ZASCA 132 (at www.saflii.org.za)). Fourth, to the extent that evidence may be admissible to contextualise the document (since 'context is everything') to establish its factual matrix or purpose or for purposes of identification, 'one must use it as conservatively as possible' (Delmas Milling Co Ltd v Du Plessis 1955 (3) SA 447 (A) at 455B - C). The time has arrived for us to accept that there is no merit in trying to distinguish between 'background circumstances' and 'surrounding circumstances'.

The distinction is artificial and, in addition, both terms are vague and confusing. Consequently, everything tends to be admitted. The terms 'context' or 'factual matrix' ought to suffice. (See Van der Westhuizen v Arnold 2002 (6) SA 453 (SCA) ([2002] 4 All SA 331) paras 22 and 23, and Masstores (Pty) Ltd v Murray & Roberts Construction (Pty) Ltd and Another [2008] ZASCA 94; 2008 (6) SA 654 (SCA) para 7.)”

[emphasis added]

 

[25]    Similarly, reference was made to Natal Joint Municipal Pension Fund v Endumeni Municipality 2012 (4) SA 593 (SCA):

“[18] Over the last century there have been significant developments in the law relating to the interpretation of documents, both in this country and in others that follow similar rules to our own.13 It is unnecessary to add unduly to the burden of annotations by trawling through the case law on the construction of documents in order to trace those developments. The relevant authorities are collected and summarised in Bastian Financial Services (Pty) Ltd v General Hendrik Schoeman Primary School. The present state of the law can be expressed as follows: Interpretation is the process of attributing meaning to the words used in a document, be it legislation, some other statutory instrument, or contract, having regard to the context provided by reading the particular provision or provisions in the light of the document as a whole and the circumstances attendant upon its coming into existence. Whatever the nature of the document, consideration must be given to the language used in the light of the ordinary rules of grammar and syntax; the context in which the provision appears; the apparent purpose to which it is directed and the material known to those responsible for its production. Where more than one meaning is possible each possibility must be weighed in the light of all these factors. The process is objective, not subjective. A sensible meaning is to be preferred to one that leads to insensible or unbusinesslike results or undermines the apparent purpose of the document. Judges must be alert to, and guard against, the temptation to substitute what they regard as reasonable, sensible or businesslike for the words actually used. To do so in regard to a statute or statutory instrument is to cross the divide between interpretation and legislation; in a contractual context it is to make a contract for the parties other than the one they in fact made. The 'inevitable point of departure is the language of the provision itself', read in context and having regard to the purpose of the provision and the background to the preparation and production of the document.

[19] All this is consistent with the 'emerging trend in statutory construction'. It clearly adopts as the proper approach to the interpretation of documents the second of the two possible approaches mentioned by Schreiner JA in Jaga v Dönges NO and Another; Bhana v Dönges NO and Another, namely that from the outset one considers the context and the language together, with neither predominating over the other. This is the approach that courts in South Africa should now follow, without the need to cite authorities from an earlier era that are not necessarily consistent and frequently reflect an approach to interpretation that is no longer appropriate. The path that Schreiner JA pointed to is now received wisdom elsewhere. Thus Sir Anthony Mason CJ said:

'Problems of legal interpretation are not solved satisfactorily by ritual incantations which emphasise the clarity of meaning which words have when viewed in isolation, divorced from their context. The modern approach to interpretation insists that context be considered in the first instance, especially in the case of general words, and not merely at some later stage when ambiguity might be thought to arise.'

More recently, Lord Clarke SCJ said 'the exercise of construction is essentially one unitary exercise'.”[4]

[26]    Does the more wholistic approach to contractual interpretation and the more relaxed approach to the consideration of the context in which a contract is concluded, mean that this court is at large to read into the agreement an express prohibition against Benjamin working for a competitor? I agree that it would make the protection of Transpet’s proprietary information, much easier if such a provision existed. However, I do not believe that a more contextual approach to contractual interpretation means that a very significant term imposing onerous obligations on one party, can simply be imputed to the contract, without the party establishing the existence of that obligation in the form of a term implied by law, trade or custom or tacitly.

[27]    Quite apart from the fact that Transpet has not pleaded the existence of any tacit term, the onerous nature of the provision contended for, in the context of a contract setting out other obligations on Benjamin in great detail is inimical to reading such a term in, even if it had been pleaded. See e.g. Union Government (Minister of Railways and Harbours) v Faux Ltd 1916 AD 105 where Solomon JA said:

'Now it is needless to say that a Court should be very slow to imply a term in a contract which is not to be found there, more particularly in a case like the present, where in the printed conditions the whole subject is dealt with in the greatest detail; and where the condition which we are asked to imply is one of the very greatest importance on a matter which could not possibly have been absent from the minds of the parties at the time when the agreement was made.'[5]

[28]    Likewise, a term will not be readily imputed to a contract merely because it would be more convenient for one party. In Ranch International Pipelines (Transvaal) (Pty) Ltd v LMG Construction (City) (Pty) Ltd; LMG Construction (City) (Pty) Ltd v Ranch International Pipelines (Transvaal) (Pty) Ltd And Others 1984 (3) SA 861 (W) the court approved the following dictum which is relevant:

“I have always regarded the analysis of MILLIN J in Rapp and Maister v Aronovsky 1943 WLD 68 of that contract, to determine whether a term should be implied therein, with respect, as one of the best examples of the logical and judicial approach to this kind of problem. Amongst others, he said at 74 - 75:

‘It has often been pointed out that it is not sufficient to show that the term would be highly reasonable or convenient to one or other or even both of the parties. The cases show that the Court has to be continually on its guard against being persuaded to introduce a term which, on analysis of the argument, appears to be no more than a term which would make the carrying out of the contract more convenient to one of the parties or to both of the parties and might have been included if the parties had thought of it and if they had both been reasonable. You are not to imply the term merely because if one of the parties or a bystander had suggested it, you think only an unreasonable person would have disagreed. You have to be satisfied that both parties did agree. It is quite a different proposition, if in the hypothetical case SCRUTTON LJ puts in, you feel the parties might say: 'You have called our minds to something we have not thought of and what you say is not unreasonable, let us discuss it.' If that is all that the Court feels might have happened, then the Court is not entitled to imply the term ...

If you come to the conclusion that if the matter had been raised with the parties at the time they were agreeing and a number of different ways of dealing with the point could have been suggested, it is surely not competent for a party seeking to imply a term to select one of these possibilities and to say that is the term which ought to be implied. If other terms could be thought of which are just as reasonable, or even more reasonable, then it is clear that none of those terms was necessarily agreed by the parties, and the person proposing the term has merely selected arbitrarily one of a number of possible terms which might have been agreed if the parties had had their attention drawn to the matter.’ "[6]

(emphasis in judgment)

[29]    For the reasons above, Transpet’s contention that a reading of the contract as a whole requires the court to conclude that existence of a prohibition against Benjamin being employed by a competitor is part of the agreement must be rejected. Consequently, I am satisfied that Transpet has not established that Benjamin has breached the agreement by taking up employment with SA Relocations.

[30]    In the circumstances, in the absence of demonstrating any breach of the agreement, it is not necessary to consider the other legal considerations governing the enforcement thereof.

Costs

[31]    The application was launched on 5 March 2021 and set down for hearing on 18 March 2021. By agreement the hearing was postponed, without the urgency of the application been determined, apparently in order to allow a full set of pleadings to be filed. By that stage, Benjamin had not filed her answering affidavit and had not received a response to her undertaking to comply with the terms of the agreement. Costs were reserved on that occasion. As mentioned above, on the next occasion, Transpet applied for and was granted a postponement to file a supplementary affidavit to deal with information which had just come to its attention which is believed was indicative of a new breach of the agreement. It also applied to join the second respondent. The joinder application was not opposed.

[32]    On 15 March 2021, Benjamin made undertakings in terms of all the material obligations in the agreement. In the letter containing the undertaking, Transpet’s attention was drawn to the fact that there was no express provision preventing her from working for a competitor. She invited Transpet to withdraw the application, but Transpet did not respond before the first enrolment of the application, when the matter was postponed. At the very least, Transpet could have responded to that before the hearing on 18 March. It never even considered approaching Benjamin with a view to agreeing that such an undertaking could be made a court order.

[33]    At the hearing of the matter, Benjamin’s counsel, Mr Kelly, argued for a punitive cost order to be made against Transpet. However, none of Benjamin’s pleadings contained any prayer for a punitive cost order. I might have been inclined to make a punitive cost order because of the absence of an express provision prohibiting Benjamin from working for a competitor and in the light of the undertaking given before the answering affidavit was filed, which comprehended all of the obligations in the agreement. However, in the absence of prior notice to Transpet of Benjamin’s intention to seek a punitive cost order, I am reluctant to make a cost order on those terms.

Order

[1]       The application is dealt with as one of urgency, and any noncompliance with the time periods and rules of service in the Labour Court Rules is condoned.

[2]       SA Relocations CC is joined as the Second Respondent.

[3]       The application is dismissed.

[4]       The Applicant must pay the First Respondent’s costs incurred in opposing the application, including the wasted costs of the postponements on 18 March and 22 April 2021 and including the costs of opposing the interlocutory application. Costs shall include the costs of counsel.

Lagrange J

Judge of the Labour Court of South Africa

Appearances/Representatives
For the Applicant	M Aggenbach instructed by John Dua Attorneys
For the First Respondent	L Kelly & W Rosenberg instructed by Adams & Adams

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