Cci Call Centres (Pty) Ltd v Sequeira

• Jurisdiction: South Africa
• Judge: Vahed J, Mokgohloa J and Marks AJ
• Judgment Date: 01 April 2014
• Docket Number: AR571/2013
• Court: KwaZulu-Natal High Court, Pietermaritzburg
• Hearing Date: 28 March 2014
• Citation: 2014 JDR 0777 (KZP)

Vahed J:

[1]

In this appeal the appellant applied, in motion proceedings, unsuccessfully before Lopes J in the Court a quo to enforce a covenant in restraint of trade concluded between it and the first respondent, which, if enforced, inter alia, would have precluded the first respondent from becoming employed by the second respondent, a competitor of the appellant. The appeal serves before us with the leave of the court a quo.

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Vahed J

[2]

The application initially served before Lopes J as an urgent application on 31 July 2013. On that date he granted an Order fixing dates for the exchange of further affidavits, recording certain undertakings made by the respondents, and adjourned the application to 20 August 2013 for the hearing of the opposed application. On that date he heard the opposed application and in a reserved judgment handed down on 13 September 2013 he dismissed the application with costs. On 27 September 2013 he granted the application for leave to appeal to this court.

[3]

The respondents' heads of argument were delivered on 18 March 2014. Although on that date their delivery was already a few days out of time the appellant makes no issue of this and to the extent that condonation is necessary for their late delivery, it is granted. However, with the delivery of those heads of argument we noted, for the first time, that:

"[t]he Appellant subsequently instituted further proceedings, an application for interim relief pending the determination of this appeal but that application was not proceeded with after the Judge President instructed that the present appeal was to be enrolled and heard as one of urgency during the course of March 2014. The costs of that application for interim relief were, by agreement between the parties, reserved for the decision of this Court."

[4]

We have not been furnished with the papers in those "further proceedings", have no appreciation of what was said therein, and have not been appraised of the basis upon which we are to reach a decision on those reserved costs. It may be contended that the record is defective in that regard and I shall have something to say about the preparation of the record in this appeal later in this judgment.

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Vahed J

[5]

My reason for referring to the above extract from the introductory paragraph to the respondents' heads of argument is to demonstrate that this appeal serves before us as a matter of urgency. It is self-evidently urgent because the covenant which the appellant seeks to enforce expires at midnight on 30 June 2014 and it is manifestly just that the parties know where they stand in relation to its enforceability sooner rather than later.

[6]

At the conclusion of argument on 28 March 2014 we indicated that this judgment would be delivered on 02 April 2014. We did so because the matter is urgent, as I have noted, but we also do so for, amongst others, the reason that a delayed judgment would present certain difficulties which would impact on further delay.

[7]

We have been greatly assisted by the detailed heads of argument delivered by both sides; so detailed that they approximate full written argument as opposed to being mere skeletons. We record our appreciation of counsels' efforts.

[8]

The essence of the case, but for a few errors which I will revert to later in this judgment, is more than adequately captured in the introductory paragraphs of the judgment of the court a quo. I repeat those here:

'[1] The [appellant], CCI Call Centres (Pty) Ltd seeks an order interdicting and restraining the first respondent for a period of twelve months calculated from the 1st July 2013 from being employed by the second respondent and from carrying on business in the call centre industry, together with certain other relief.

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Vahed J

[2] The relief is sought pursuant to a restraint of trade agreement which was contained in an employment contract signed by the [appellant] and the first respondent. The relevant history of the relationship between the parties is as follows:

(a)

the [appellant] is part of an international call centre business registered in Mauritius. It has been incorporated in South Africa since September 2009, operates only from Durban, and has 2 000 employees;

(b)

the [appellant] provides what are referred to as 'Inbound Services' and 'Outbound Services' to its clients. 'Inbound Services' involve call centre operators fielding queries from the [appellant's] clients' customers relating to those clients' products. 'Outbound Services' involve call centre operators calling prospective customers of the [appellant's] clients to persuade them to part with information about themselves to be used for marketing purposes, or to sell them the [appellant's] clients' products;

(c)

the first respondent was employed by the second largest client of the [appellant] from March 2004 to March 2007 as a district sales manager;

(d)

from April 2007 to January 2012 he was employed by the [appellant's] largest client ('TT') as an account manager;

(e)

in 2010 the first respondent was seconded to work at the [appellant] where his function was to manage the [appellant's] 'inbound sales campaign' for TT;

(f)

having been made redundant by TT in 2012, the first respondent was thereafter employed by the [appellant] as campaign manager for the 'outbound campaign' for TT. He was later put in charge of the TT 'Web Chat' campaign whereby customers could have a live feed with sales agents. He also worked on a campaign called 'Correspondence' where customer queries are dealt with through email correspondence;

(g)

on the 15th March 2013, after the first respondent had been working for the [appellant] for approximately fourteen and a half months, he was asked to sign an employment contract. In the employment contract, at paragraph 18, is what is commonly referred to as a restraint of trade clause. The clause is headed 'Confidentiality Non-Solicitation and Restraint' and covers some ten typewritten pages. It is common cause that the first respondent was asked to sign the

2014 JDR 0777 p5

Vahed J

employment contract 'for audit purposes'. The first respondent avers, and it is not disputed, that he did not read the document;

(h)

on the 1st April 2013, some two weeks after he had signed that document, the first respondent resigned from his employment with the [appellant];

(i)

he left the employment of the [appellant] on the 1st July 2013;

(j)

thereafter the first respondent was employed by the second respondent;

(k)

the second respondent, Coracall (Pty) Ltd, against whom the [appellant] seeks no relief, is a competitor of the [appellant] and is also engaged in the call centre industry.

[3]

On the 31st July 2013 I granted an order by consent between the parties setting dates for the delivery of affidavits and heads of argument, and recording an undertaking that the first respondent would not be employed by the second respondent pending the outcome of this application, and that the [appellant] would continue to pay the first respondent's salary during that period. The matter was then heard as an opposed application on the 20th August 2013.

[4]

Mr Pammenter SC who appeared for the applicant submitted that I was to apply the test for final relief in motion proceedings as set out in Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A) – i.e. I was to grant an order only if the facts as stated by the respondent together with the admitted facts in the [appellant's] affidavit justify the order, unless I am of the view that a denial by the first respondent of a fact alleged by the [appellant] may not be such as to raise a real, genuine or bona fide dispute of fact because it is clearly untenable.

[5]

Mr Pammenter submitted that once that test in Plascon-Evans was satisfied I should then consider whether the restraint imposed was reasonable. He referred to the tension which is always evident in these cases between the right of the first respondent to be allowed to carry on his employment, and the right of the [appellant] to protect its relationship with its customers and its confidential information.

[6]

With regard to the question of onus and the approach of the courts generally to restraint of trade agreements, I have been referred to, and have considered Reddy v Siemens Telecommunications (Pty) Ltd 2007 (2) SA 486 (SCA); Advtech Resourcing (Pty) Ltd t/a Communicate Personnel Group v Kuhn and Another 2008 (2) SA 375 (C); Dickinson

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Vahed J

Holdings (Group) (Pty) Ltd and Others v Du Plessis and Another 2008 (4) SA 214 (N); Den Braven SA (Pty) Ltd v Pillay and Another 2008 (6) SA 229 (D); Mozart Ice Cream Franchises (Pty) Ltd v Davidoff and Another 2009 (3) SA 78 (C) and Experian South Africa (Pty) Ltd v Haynes and Another 2013 (1) SA 135 (GSJ).

[7]

The [appellant's] case is set out in a wordy affidavit filled with phrases which are typical of the marketing industry. The result is a very confusing affidavit and it is necessary to sift through these phrases in order to be able to summarise the [appellant's] complaints as follows:

(a)

the first respondent is one of the [appellant's] 'longest standing high-ranking officials';

(b)

during his employment with the [appellant], the first respondent has had access to, and used, 'state of the art telephony and information technology systems and programmes and a mix of local and UK based management structures';

(c)

these 'sophisticated IT systems and programmes' are unique to the [appellant's] business;

(d)

the [appellant] has 'developed specific and valued relationships with identified suppliers and human resources, telephony and IT industries' and 'the [appellant] has been able to develop practical methodologies (sic) for maintaining data and other clients lists for...