Highlands Park Football Club Ltd v Viljoen and Another

• Jurisdiction: South Africa
• Judge: Vermooten J
• Judgment Date: 23 February 1978
• Citation: 1978 (3) SA 191 (W)
• Court: Witwatersrand Local Division

Vermooten J:

This application came before me as a matter of urgency. Having heard argument on January 25 and 26 and 1 February 1978, I made the order appearing at the end hereof on 3 February and intimated that my reasons would follow. These are the reasons.

I was informed at the commencement of the argument that the applicant had D settled its differences with the first respondent. I say no more about him. The case proceeded against the second respondent alone.

The applicant is a company which carries on business as the proprietor of football ("soccer") teams which play professional and amateur football. The second respondent is 26 years of age. He spent most of his leisure E time during the last 16 years training and improving his skill as a soccer player. He turned professional at the age of 18 years. Approximately 50 per centum of his annual income has been derived from soccer.

The applicant applies for a final interdict restraining the second respondent from playing professional football for any club in the Republic F of South Africa other than Highlands Park Football Club until 1 October 1980 save with the prior written permission of the applicant.

During the hearing Mr Morris, who appeared for the applicant, obtained the following amendment as an alternative to this prayer, namely a prayer interdicting and restraining second respondent from so playing football

"pending (1) the decision of the applicant (which decision shall be G exercised within a reasonable time) to place the second respondent on the 'open to transfer' list; (2) the transfer of the Second respondent resulting through his having been placed on the 'open to transfer' list."

Mr Morris was prepared to accept an addition, if I grant an order in terms of the alternative, of the words "applicant is to make its election within one week".

H From the founding affidavit it appears that applicant's first football team is one of the leading football teams in the Republic of South Africa, and has won the National Football League eight times, including in 1977. The team has on various occasions won every major football competition in the Republic of South-Africa.

The applicant's only assets consist of contractual rights which bind its football' players to play football for the applicant. These rights are commonly regarded as cedable and saleable amongst football clubs. It is common practice for football clubs to sell and purchase the obligations of

Vermooten J

professional footballers to play football for a particular club. The normal procedure in regard to such transactions is that, if either the player or the club is dissatisfied with the contractual arrangements concluded, the player is placed on an "open to transfer" list, and offers are then invited from other football clubs to transfer the player to such A club, subject to a suitable transfer fee being negotiated and suitable terms being negotiated between the purchasing club and the player being transferred. Under such conditions players are, in common football parlance, "bought and sold" between clubs.

B In April 1977 the second respondent agreed to play for the applicant. He was "bought" from a club called Roodepoort Guild for an amount of R1 500. Applicant and second respondent entered into a written contract of service whereby applicant became the employer and second respondent the employee. In the contract his monthly salary was fixed at R200. In addition it C provided for a travelling allowance, a bonus for a win and a draw, a special incentive knock out competition bonus, as well as medical benefits if he got injured. The contract was signed on 7 April 1977 and was to endure from that date until, in the event, 30 November 1977. Clause 6 provided that, if applicant desired to retain the second respondent's D services after the expiry of the term of the agreement, the applicant would be entitled to call for such renewal on terms to be mutually agreed between the parties, provided that, where no agreement could be reached in respect of such renewal, the applicant would have the right and option of placing second respondent on the "open to transfer" list at a transfer price commensurate with second respondent's market value.

E The cage turns on the provisions of clause 12 (a). It reads as follows:

"12

Restraint

(a)

The player agrees, undertakes and binds himself that on the expiry of this agreement and unless and until he is formally transferred by the Club to another club, he will not for a period of three years after the date of such expiry play professional football in the Republic of South Africa, save F with the prior written permission of the Club."

The playing season having finally terminated on 30 November 1977, the applicant's director and chairman and the deponent of its founding affidavit, a Mr R D Evans, held a meeting of the club's first team players of which second respondent was naturally a member, on 6 December 1977. What he told the players at that meeting is in dispute but even if I accept the second respondent's version, as Mr Morris concedes I must, I G find it unnecessary to go into details. Suffice it to say that second respondent (as well as other first team players) concluded, from what they were told, that his obligation to be available to play for the applicant during the 1978 season had come to an end. This was confirmed in his mind when, at the close of the meeting, he told the applicant's manager that he H felt the contract was no longer binding on him and that he intended looking for employment with another club, and got the reply: "I don't blame you".

Two days later, on 8 December 1977, he joined the Dynamos Football Club.

A letter from applicant's attorney to second respondent was followed by a reply from the latter's attorneys and thereafter the present proceedings were launched.

Vermooten J

Second respondent filed an answering affidavit, but the applicant did not file a replying affidavit.

A One issue can be disposed of shortly. The second respondent annexed a voluminous document of 80 pages being the "Constitution, Rules, Regulations and Bye-Laws of the National Football League of South Africa", instead of placing a few brief extracts thereof before me. Mr Morris asked for a special order of the costs in connection therewith if I should be against the applicant. Mr Bizos who appeared for second respondent did not B seriously contest this request. I consequently did make such a special order, as appears at the end hereof.

The main defence, raised in the answering affidavit, and argued by Mr Bizos, concerned the validity of the restraint, clause, clause 12 (a) supra.

Counsel informed me that they had been unable to find any reported case in C which the South African Courts have dealt with a restraint of trade clause pertaining to a professional football player. This case must consequently be decided on general principles.

Mr Morris submitted that I should follow the recent decision of the Full Bench of Natal in Roffey v Catterall, Edwards & Goudré (Pty) Ltd 1977 (4) SA 494 (N) D to the effect that public policy in South Africa does not generally condemn covenants in restraint of trade, and that, according to our law, they are not prima facie void; if any at all are contrary to public policy and unenforceable on that account, they are confined to those which have been proved unreasonable. This conclusion is precisely the reverse of what has been held in several cases, notably in the Transvaal until now.

E Mr Bizos submitted that all contracts in restraint of trade are unenforceable as they are prima facie void unless the party seeking to rely on the restraint can show special circumstances why the restraint should be imposed; that the onus of proof is on the party seeking to impose the restraint; that this is a well established principle universally followed in the Transvaal and that 1, sitting alone, should not depart from it.

F It is of course clear that I am not bound by the Natal decision because, although a Full Bench case, it is a decision of another Division. But it may well be of such persuasive force as to induce me to follow it, and to hold that the Transvaal cases on which Mr Bizos relies, which are all G decisions of single Judges, were clearly wrongly decided. It therefore becomes necessary to examine both the Transvaal cases and Roffey's case in Natal.

The first case upon which Mr Bizos relies is Gordon v Van Blerk 1927 TPD 770. BARRY J there mentioned the case of Empire Theatres Co Ltd v Lamor 1910 WLD 289 in which, on the authority of certain English cases referred H to therein, it was decided that the onus lay on the covenantor, ie the party upon whom the restraint was imposed, to show that the restraint was unreasonable. Both these were cases concerning employer and employee restraints. But BARRY J proceeded to point out that since the Empire Theatres case the principle laid down in the Nordenfelt v Maxi Nordenfelt Guns and Ammunition Co case 1894 AC 535 (HL) had been more fully developed, and the burden of proof which previously was held to lie on the covenantor had been changed and imposed on the covenantee. In support of that statement BARRY J referred to Attwood v Lamont (1920) 3 KB 571; Mason v Provident Clothing and...