L & G Tool & Machinery Distributers Limited v Hall

• Jurisdiction: South Africa
• Judge: TA Maumela J
• Judgment Date: 28 November 2019
• Docket Number: 21666/2018
• Hearing Date: 28 November 2019
• Court: North Gauteng High Court, Pretoria

Maumela J:

1

In this matter the excipients who are the Defendants in the main matter, seek an order to the following effect

1.1.

That the Plaintiff's particulars of claim be ordered to be struck out;

1.2

That the Plaintiff be afforded 10 (ten) days within which to amend its particulars of claim;

1.3.

That Plaintiff be ordered to pay the costs of the exception.

BACKGROUND.

2.

On the 23rd of March 2018, the Plaintiff instituted action against three Defendants, claiming a declaratory order. In line with the declaratory order, the Third Defendant is to be interdicted to discontinue operations of a piping business. The Plaintiff also seeks a declaratory order declaring that the Defendants are jointly and severally liable for the Plaintiff's damages. Plaintiff contended that the Defendants conducted their practice wrongfully, unlawfully and that they engaged in an unfair competition.

3.

The Plaintiff further seeks an interdict the effect whereof will be to interdict the Defendants from acquiring, using and making use of any of its trade secrets and confidential information. It also seeks an order to the effect that in the event where the damages are not ascertainable, at the trial, then the aspect of quantum should be postponed.

4.

The Plaintiff further alleges that it employed the Second Defendant as a Technical Service Technician. It stated that in terms of his contract of employment, the Second Defendant had certain obligation as set out in the particulars of claim. Plaintiff alleges that according to implied terms of the contract of employment between him, the First and the Second Defendants, the First and the Second Defendants are obliged:

"4.1.

...to faithfully and diligently serve the Plaintiff and the Plaintiff's business for the benefit of the Plaintiff's business;

4.2.

...not to use for their own benefit or the benefit of any third person, any confidential information they may have obtained of and

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concerning the Plaintiff's business ...;

4.3.

...not to sabotage the Plaintiff's piping business but to act at all times for the benefit of the Plaintiff and not for the benefit of any of the Defendants and/or Third party."

5.

In addition, it is alleged that the First and the Second Defendants owed a duty of care to the Plaintiff. It is further alleged that during the employment of the First and Second Defendants, they came into possession of confidential information relating to the Plaintiff's business as is more fully set out in paragraph 16 of the particulars of claim.

6.

The Plaintiff alleges in the particulars of claim as follows: "17. That during or about 2015; alternatively 2016, the date being unknown to the Plaintiff, the First and Second Defendants, whilst still employed by the Plaintiff and whilst they still owed the Plaintiff a duty of care and good faith, wrongfully conspired with each other and the Third Defendant to commence a piping business in the name of the Third Defendant which will be in opposition and in competition with the Plaintiff's business, which will cause a financial loss for the Plaintiff and a financial benefit for the Defendants and for that purpose agreed to ..."

7.

It is further alleged that pursuant to the conspiracy, it was agreed that the Third Defendant would compete with the Plaintiff, that the First and the Second Defendants would be directors of the Third Defendant; and that the First and Second Defendants will provide the Third Defendant with technical skill, expertise and knowledge, and that the First and the Second Defendants would utilise their knowledge relating to the Plaintiff's business for the purpose of furthering the interests and profitability of the Third Defendant. That it was also agreed that the First and the Second Defendants would use the Plaintiff's trade secrets and confidential information relating to the Plaintiff's pricing structures, profit margins, suppliers, etc. for the benefit of the Defendants.

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8.

It is alleged that from approximately 2016, the First, Second and Third Defendants started soliciting business for and on behalf of the Third Defendant. It is alleged that they concluded contracts which should have been for the benefit of the Plaintiff, but were diverted to the Third Defendant. That through the business which the First and second Defendants should have obtained for the Plaintiff, they imported more than 230 containers containing piping and piping accessories from China for the business that the Defendants. In that way, they were unlawfully conducting business in competition with the Plaintiff [1] .

9.

The Plaintiff further alleges that the Third Defendant's business competed with its business and that the First and the Second Defendants have:

'9.1.

Used and are continuing to use the Plaintiff's confidential information and trade secrets relating to the Plaintiff's piping business;

9.2.

Breached the terms of their contracts of employment and

9.3.

That the Third Defendant has continued to compete unlawfully with the Plaintiff's business."

10.

The Plaintiff alleges further as follows:

10.1.

"By reason of the assistance and information wrongfully given by the First and second Defendants to the Third Defendant in pursuance of the conspiracy, including the assistance and information given by the First and second Defendants in breach of their duties and contractual obligations to the Plaintiff as more fully set out above, the Third Defendant's competition with the Plaintiff's piping business is wrongful, unlawful and unfair;"

11.

In the notice of exception of the Defendants dated the 29th of May 2018, they allege that: "... the Plaintiff failed to include a concise statement of facts which will be material to sustain the cause of action and the damage in that ...". [2] It is further alleged that the Plaintiff failed to include a concise statement of fact to sustain the

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conclusion that the Defendants indeed conducted business which can be defined as unlawful competition.

12.

Applicant submits that there is no merit in the objections raised, because its particulars of claim clearly set out all the elements of the unlawful competition and the facts relating to the unlawful competition alleged. It submits that in order to assess the complaint relating to the disclosure of a cause of action, the Defendants had a duty to satisfy the Court that the conclusion of law...