IN THE HIGH COURT OF SOUTH AFRICA 
(WESTERN CAPE HIGH COURT, CAPE TOWN)

Case no.:2415/2011
In the matter between

and

JUDGMENT DELIVERED ON 9 MAY 2011

SAMELA, J

1.
a)	paragraphs 55. 93 and 94 of the founding affidavit on the grounds that these paragraphs comprise inadmissible opinion evidence;
b)	paragraphs 4. 5, 6, 7, 8,10 and 12 of the affidavit of Heinrich Gericke ("DD12") on the grounds that these paragraphs comprise inadmissible opinion evidence and/or inadmissible hearsay evidence;
c)	paragraphs 62.1 62.2 and 62.3 of the founding affidavit on the grounds that the contents of the paragraphs are irrelevant;
d)	paragraph 28 of the replying affidavit as being inadmissible hearsay and/or opinion evidence;
e)	the affidavit of Thomas Maydon as well as annexure "TM 1" thereto on the grounds that the contents thereof constitute new material sought to be introduced in reply;
f)	the letter of Rohan Dyer ("DD14") as being inadmissible opinion and/or hearsay evidence; and
g)	paragraphs 4 to 24 of the further affidavit of Mr Heinrich Gericke (dated 23 February 2011) on the grounds that these paragraphs constitute inadmissible opinion and/or inadmissible hearsay evidence.

2. Urgency. The Respondent argued that the Applicant failed to justify the urgent basis on which the application has been brought, or to explain its dilatory conduct in the face of the urgency for which it contends. The Respondent submitted further that the urgent basis on which the present application has been launched constitutes an abuse which this court ought not to entertain.
3. Application to file further affidavits in terms of Rule 6(5)(e) of the Uniform Rules of Court.
[4]     An application to strike out is provided by Rule 23 of the Uniform Court Rules.
Rule 23 provides the following:
(2) Where any pleading contains averments which are scandalous, vexatious or irrelevant, the opposite party may, within the period allowed for filing any subsequent pleading, apply for the striking out of the matter aforesaid, and may set such application down for hearing in terms of paragraph (f) or subrule (5) of rule 6. but the court shall not grant the same unless it is satisfied that the applicant will be prejudiced in the conduct of his claim or defence if it be not granted.

[5] The Respondent in making an application to strike out portions of the Applicant's affidavits and annexures to such affidavits have failed to show any prejudice if the application is not granted.

[6]     The consolidated practice notes of this division regarding urgent applications
provides the following in 34(3):
"Opposed matters which are not of extreme urgency, but which are nevertheless too urgent to await a hearing in the ordinary course on the continuous roll will be granted some preference. For convenience these matters are called 'semi-urgent' matters."

The question of urgency is no longer an issue in this matter because the matter is heard
in the semi-urgent court.

[7] After having read the papers relating to the points in limine and also having heard the submissions, I am of the view that there is no substance to any of the points raised in paragraphs 3 and 4 above. In the result, the application is dismissed. No costs order is made in respect of the application.

[8] The Respondent also applied to submit further affidavits into evidence. The Applicant did not firmly oppose additional affidavits. Rule 6(5)(e) of the Uniform Rules of Court provides:
"within 10 days of the service upon him. of the affidavit and documents referred to in subparagraph (ii) of paragraph (d) of subrule (5) the applicant may deliver a replying affidavit. The court may in its discretion permit the filing of further affidavits."

(a)    The reason why the evidence was not led timeously;
(b) The degree of materiality of the evidence;
(c) The possibility that it may have been shaped to 'relieve the pinch of the shoe';
(d) The balance of prejudice, viz the prejudice to the plaintiff if the application is refused and the prejudice to the defendant if it is granted;
(e) The stage which the particular litigation has reached. Where judgment has been reserved after alt evidence has been heard and, before judgment is delivered, plaintiff asks for leave to lead further evidence, it may well be that he or she will have a greater burden because of factors such as the increased possibility of prejudice to the defendant, the greater need for finality, and the undesirability of a reconsideration of the whole case, and perhaps also the convenience of the court;
(f) The 'healing balm of an appropriate order as to costs;
(g) The general need for finality in judicial proceedings; and

I exercised judicial discretion in allowing the filing of further affidavits. I allowed admittance of further affidavits against the backdrop of fundamental consideration that the matter be adjudicated upon all the relevant issues in dispute. Also, I considered the question of fairness to the parties involved, and guarded against prejudice caused by filing of additional affidavits, which could not be remedied by an appropriate costs order.

[10] The Respondent opposed the relief sought on the basis that it is unreasonable and unenforceable.

[12] The basis for the relief sought by the Applicant is that in terms of the restraint agreement the Respondent undertook, amongst other things, not to work for any of Applicant's competitors or suppliers within a six months period stipulated in the agreement after the termination of his service with the Applicant. Furthermore, he was barred from sharing any confidential information he was exposed to during his term of employment with Applicant, with the abovementioned, within the said period stipulated in the agreement.

[13] For convenience's sake the relevant part of the restraint of trade agreement signed between the Applicant and the Respondent is the following:
'If and when you are promoted to the Planner position, then, due to the fact that you will be given access to even more confidential information, should your employment with Truworths be terminated during such time or subsequently during your time as an employee of Truworths in any of its buying or merchandise departments including without limitation in the position of buyer or merchandise planner or a more senior position regardless of the title being used at the time, you cannot work for any of our competitors in South Africa, either directly or indirectly, or for any of the suppliers of our competitors where such supplier is not also a supplier to Truworths. for ten months (later changed to six months) after you have left Truworths, i.e. ten (now six) months after the date of termination of your employment.
You cannot share any of our confidential information by any means (i.e. fax, copy, verbally or digitally), whether during or after termination of your employment with Truworths without the express written permission of our Chief Executive Officer."

[14]   The following are in dispute:

[15]   The court is required to determine whether:
(a) the Applicant and Spitz are competitors;
(b) the restraint is reasonable and enforceable; and
(c) to grant or not an interdict against the Respondent.

[16]   The Respondent opposed the application on various grounds:
Firstly, the Respondent denies that the Applicant and Spitz are competitors.

[17] Secondly, he denies that the information which the Applicant seeks to protect by the enforcement of the restraint of trade undertaking is objectively useful to Spitz, and as such, constitutes a proprietary interest deserving of protection by the enforcement of the restraint of trade.

[18] Thirdly, the Respondent denies that his employment with Spitz will pose any risk to the Applicant and or warrants the enforcement of the restraint undertaking.

[19]   Section 22 of the Constitution of the Republic of South Africa provides:
"Every citizen has the right to choose their trade, occupation or profession freely. The practice of a trade, occupation or profession may be regulated by law."

[20] Defining "Competition" the court in Payen Components CC v Boric Gaskets CC and Others 1994(2) SA 464 (WLD) at 473 H-l said the following:

"In general terms competition involves the idea of a struggle between rivals endeavouring to obtain the same end. It may be said to exist whenever there is a potential diversion of trade from one to another. For competition to exist the articles or services of the competitors should be related to the same purpose or must satisfy the same need."

Applicant and Spitz comparative price tables. 

		Total		Total	UZZI	
	Min	Min on FJS1	Max	Max on FJS1	Min	Max	
Double Mercerised	330	380	475	475	370	399	
Knits (Ts & Golfers)	120	140	360	299	160	299	
Woven Shirts	170	170	425	399	280	380	
Knitwear	250	299	499	399	299	399	
Denim	299	350	550	499	360	550	
Non Denim Pants	320	280	475	450	350	450	
Chinos	250	280	425	399	350	350	
Jackets	399	399	999	799	499	999	
Formal Shoes	330	360	650	599	450	650	
Casual Shoes	199	299	650	550	299	650	
								550	
Sweats	NA	340	425		425	340		340.360.399	
Suit Jackets	NA	699	999	799	999		699.750. 799		
Suit Trouser	NA	299	450	380	450		299,360.380		
Shoes Formal	1295-2295	360	599	450, 499, 550, 599	425		360.380, 390.399, 425. 450		
Shoes Casual	795-1495	299	550	399, 450	399. 425. 450		299.360. 390.399, 425.450, 499. 550		

Stock	Kurt Geiger (min-max)	Applicant (min-max)	
Double Mercerised	R595 - R795	R330 - R475	
Golfers			
Knits (T-shirts & Golfers	R395 - R795	R120 - R360	
Woven Shins	R695-R895	R170-R425	
Knitwear	R495 - R695	R250 - R499	
Denim	R695- R1.195	R299 - R550	
Non Denim Trousers		R320 - R475	
Chino	R595 - R895	R250-R425	
Jackets	R795 - R4,495	R399 - R999	
	R1.295-R2.295	R330 - R650	
Casual Shoes	R795-R1.495	R199-R650	

(a) Is there an interest of the one party which is deserving of protection at the termination of the agreement?
(b) Is such interest being prejudiced by the other party?
(c) If so. does such interest so weigh up qualitatively and quantitatively against the interest of the other party that the latter should not be economically inactive and unproductive?
(d) Is there another fact of public policy having nothing to do with the relationship between the parties but which requires that the restraint should either be maintained or rejected?

[22] At 762 C-H the court tried to clarify the public policy issue and by so doing made reference to considerations of reasonableness, when it said:
"The public interest must be the touchstone for deciding whether the Courts will enforce
								550	
Sweats	NA	340	425		425	340		340.360.399	
Suit jacket	NA	699	999	799	999		699750.8		
Suit Trouser	NA	299	450	380	450		299360.38		
Shoes Formal	1295-2295	360	599	450, 499, 550, 599	425		360,380
390, 399
425,450		
Shoes Casual	795-1495	299	550	399, 450	399, 425, 450		299,360.390, 399, 425, 450, 499, 550		

Stock	Kurt Geiqer (min-max)	Applicant (min-max)	
Double Mercerised	R595 - R795	R330 - R475	
Golfers	
Knits (T-shirts & Golfers	R395 - R795		
Woven Shirts	R695-R895		
Knitwear	R495 - R695		
Denim	R695-R1.195		
Non Denim Trousers	R595-R1.195		
Chino	R595 - R895		
Jackets	R795 - R4.495		
Formal Shoes	R1.295-R2.295		
Casual Shoes	R795-R1.495		

(a) Is there an interest of the one party which is deserving of protection at the termination of the agreement?
(b) Is such interest being prejudiced by the other party?
(c) if so, does such interest so weigh up qualitatively and quantitatively against the interest of the other party that the latter should not be economically inactive and unproductive?
(d) Is there another fact of public policy having nothing to do with the relationship between the parties but which requires that the restraint should either be maintained or rejected?

[22] At 762 C-H the court tried to clarify the public policy issue and by so doing made reference to considerations of reasonableness, when it said:
'The public interest must be the touchstone for deciding whether the Courts will enforce the restraint clause or not. The party seeking to avoid the contractual obligation to which he had solemnly agreed should therefore be required to prove that the public interest would be detrimentally affected by the enforcement of the clause (at 892I-893D). The mere fact that the clause may be unreasonable inter partes is not normally a ground for attacking its validity, since the public interest demands that parties to a contract beheld to the terms of their agreement (at 893H-I). A second consideration however, is this: that it is also generally accepted that a person should be free to engage in useful economic activity and to contribute to the welfare of society by the exercise of the skills to which he has been trained. Any unreasonable restriction on such freedom would generally be regarded as contrary to public policy. In deciding on the enforceability of a restraint clause the Court would be required to consider both these aspects in the light of the circumstances of each particular case. There can be no justification, therefore, in the ordinary course, for limiting the concept of reasonableness to cases where a party has knowledge of trade secrets or trade connections or the established customers of a firm."

"[15] A court must make a value judgment with two principal policy considerations in mind in determining the reasonableness of a restraint. The first is that the public interest requires that parties should comply with their contractual obligations, a notion expressed by the maxim pacta servanda sunt. The second is that all persons should in the interests of society be productive and be permitted to engage in trade and commerce or the professions. Both considerations reflect not only common-law but also constitutional values."
[16] In applying these two principal considerations, the particular interests must be examined. A restraint would be unenforceable if it prevents a party after termination of his or her employment from partaking in trade or commerce without a corresponding interest of the other party deserving of protection. Such a restraint is not in the public interest:'

'An agreement in restraint of trade is enforceable unless it is unreasonable. It is generally accepted that a restraint will be considered unreasonable, and this contrary to public policy, and therefore unenforceable, if it does not protect some legally recognizable interest of the employer but merely seeks to exclude or eliminate competition/'

Tor information to be "confidential it must (a) be capable of application in trade or industry, that is it must be useful, not be public knowledge and property, (b) be known to only a restricted number of people or a closed circle, and (c) be of economic value to the person seeking to protect it."

221 at 227.

[27]   The next question is whether or not the Applicant and Spitz are competitors.

[28] Mr Sholto-Douglas SC, for the Applicant, submitted that the Applicant relies on the market analysis conducted by Mr Gericke. The market analysis showed the following conclusions:
(a) that a large portion of Applicant's higher income or upper-end customers had either shopped at Spitz's clothing and shoes stores or would do so if such a store was locally available;
(b) there are some similarities in the clothing styles, branding and pricing when one compares the Applicant's upper-end menswear range and the "Kurt Geiger" menswear range.
He further submitted that the question whether the Applicant and Spitz are competitors cannot only be determined by a comparison of the nature of their overall business operations, but rather by undertaking a simple enquiry as to whether or not they compete for the same customers. He pointed out that the test is; whether any of the products the Applicant and Spitz sell are sufficiently similar that it can be concluded that they are pursuing the same market. (See comparative tables above at para 20).

[29] Mr Rood SC, on behalf of the Respondent, relied on the opinions of Respondent's experts especially Dr Corder. He criticised Mr Gericke's market analysis as being fatally flawed and that Mr Gericke's assertion and/or opinion on the market survey that Spitz is a competitor of the Applicant are neither sustainable nor admissible. He pointed out the following regarding the Applicant's market survey, that:
(a) there is no suggestion in Mr Gericke's first affidavit that he has any qualification/s, knowledge, experience and/or expertise in the field of market research which qualifies him to conduct the market survey or analysis or to express any opinion thereon or on whether the Applicant and Spitz are competitors;
(b) no alleged finding view or opinion expressed by Mr Gericke in his affidavits is admissible;
(c) even if Mr Gericke's affidavits are held to be admissible, no weight should be attached to any finding view or opinion contained therein;
(d) the questions should be fair, and should be so formulated as to preclude weighted or conditioned response. The market survey fails to meet this requirement;
(e) Dr Corder's criticism of Mr Gericke's analysis, inter alia, methodology, composition of the participants, survey created awareness amongst the interviews that Spitz was the main subject matter of study, and could bias the results;
(f) the questionnaires contained a number of leading and biased questions;
(g) no information is provided as to any training given to interviewers or any control measures in place while interviews were conducted;

He submitted further that the Applicant and Spitz are substantially different in respect of both range and price. He concluded by submitting that the Applicant and Spitz are not competitors within the same market.

[30] There is a factual dispute between the parties regarding whether there are competitors for the purpose of enforcing the restraint clause. The Applicant avers that Spitz is a competitor as they compete for the same market. On the other side, the Respondent avers that the Applicant and Spitz are fundamentally different to each other in a number of very material respects. The effect of which the Applicant and Spitz are not competitors within the same market. As far as the factual dispute is concerned, I will resolve it on the basis of the Applicant's averment, because in my view the Respondent's version does not raise a real, genuine or bona fide dispute. In my view it is clearly far-fetched or clearly untenable.

[31] In the circumstances the Applicant and Spitz are competitors for the following reasons:

[32] The next issue is whether or not the information which the Applicant alleges the Respondent was exposed to is confidential and constitutes a protectable interest in the hands of the Respondent.

[33] Mr Sholto-Douglas submitted that the Respondent was trained, coached and had access to the following of Applicant's confidential information:
(a) the Applicant's store performance information;
(b) the Applicant's product performance information by category of merchandise, by store and overtime;
(c) how the Applicant used the above performance information;
(d) the relative performance of the different brands within the Applicant's store;
(e) the stock management philosophies implemented by the Applicant to achieve ideal "stock turns" and "weeks of stock" by category of merchandise and store;
(f) seasonal bench marks applied by the Applicant;
(g) the Applicant's methods of assorting product ranges and the processes and systems used to balance those ranges;

(j)     the Applicant's best-selling ranges and individual products the Applicant intends to capitalise on in the future, as well as the Applicant's conclusions for the performance or non-performance of certain products; 
(k)    the Applicant's mark-down strategy and philosophies to maximise stock performance and profitability;
I)	the Applicant's supplier lists;
m)	the Applicant's "Buyers Assortment Rewrite Project";
(n)    the Applicant's "Range Sheets" in respect of all Applicant's existing clothing and accessories (for Winter and Summer 2011);

(p) the Applicant's "Executive Information System", which gives a complete and detailed summary of the stock, sales, history and forward planning of the business by its divisions and every category of merchandise, which covers in detail the Applicant's financial and product strategy;
(q) the Applicants International Sourcing Division and its present and future buying strategies;
(r) "Merchandise Systems" customised by the Applicant to allocate stock based on in house algorithms using a mix of planned on;
(s) attendance at the Applicant's "Seasonal Fashion Overview" and "Directors' Synopsis" (for Winter and Summer 2011); and
(t)     retail planners plan for "replenishments".

[34]   Mr Rood countered Mr Sholto-Douglas' submission and submitted the following;

[35] I agree with Mr Shalto-Douglas' submissions because it is clear from his detailed submissions that the information is confidential and deserves protection for the following reasons;

[36] The next question is whether the restraint in question is in the public interest. Mr Sholto-Douglas submitted that the restraint is reasonable and enforceable, in that it seeks to protect the Applicant's proprietary interests, and is not against public interest, which requires the parties to comply with their contractual obligations even if it is unproductive.

[37] In reply, Mr Rood submitted that a restraint undertaking is not enforceable in that the enforcement thereof would not serve to protect any legitimate proprietary interest of the Applicant, and as such the enforcement thereof would be against public policy.

[39] There is no doubt that the Respondent voluntarily signed the restraint agreement on 21 November 2007 without any undue influence and was fully aware of the legal consequences flowing from the agreement. In the circumstances there is no basis for him to contend that he misunderstood the restraint agreement.

[40] By accepting employment with Spitz, the Respondent breached the restraint agreement. The undertaking given by the Respondent, inter alia, that objectively assessed, the Respondent's employment with Spitz poses no threat to the Applicant's product ranges, is not enough to protect the Applicant's interests because it will be difficult to enforce it. Consequently, I therefore find that the Respondent has not discharged the onus of showing that the restraint of trade agreement is unreasonable.

[41] In the circumstances I find that the Applicant has established a clear right, that is, Applicant's proprietary and business interest. The Applicant has furthermore established that there is a real likelihood that the Respondent could use the confidential information, which will cause the Applicant to suffer serious proprietary and business interests. There is no alternative or appropriate remedy available to the Applicant, because a claim for damages against the Respondent will be difficult to quantify.

[42]   In the result, the following order is made:

(a) disclosing, publishing or communicating to any third party, other than to fellow employees, any confidential information in any manner, for any reason or purpose whatsoever, without the prior written consent of the Applicant;
(b) publishing, utilising or exploiting or in any other manner whatsoever using the Applicant's confidential information for any purpose whatsoever without the prior written consent of the Applicant.
(iv) The Respondent to pay the costs, including the costs of two counsel.