Prok Africa (Pty) Ltd and Another v NTH (Pty) Ltd and Others

• Jurisdiction: South Africa
• Judge: Goldstone AJ
• Judgment Date: 12 May 1980
• Court: Witwatersrand Local Division

Goldstone, AJ.:

The applicants allege that the respondents have dishonestly obtained confidential information which has been used by the respondents for their benefit and gain and to the detriment of the business of the applicants.

H In July 1979 the applicants launched proceedings in which they sought the following relief:

"A.

An order:

1.

Directing the respondents to deliver forthwith to the applicants all copies of the applicants' technical brochure presently in their possession reflecting details of Abbey products as manufactured by the second applicant.

2.

Directing the respondents forthwith to deliver to the applicants all documents, drawings, photographs and specifications

Goldstone AJ

from which there was constructed a work platform delivered to the St Helena Gold Mines Ltd in or about March 1978, and also all or A any copies of such documents, drawings, photographs and specifications.

3.

Interdicting the respondents one or more or all of them from manufacturing or selling work platforms made to the designs of the Abbey work platform WP4/15, WP4/20 or WP4/32 or to any design derived from or substantially similar to the said designs.

4.

B Interdicting the respondents, one or more or all of them from:

4.1

using or copying any documents, drawing, specification, minute or record being the property of the first and second applicants C and Abbey Engineering or any copy or extract made therefrom for any purpose whatsoever;

4.2

designing, manufacturing or producing and from causing others to design, manufacture, produce any machine, part or component or device in respect of which drawings, specifications or technical procedures have been devised by the first applicant D and/or second applicant and/or Abbey Engineering;

4.3

describing the machinery and systems produced by the first respondent or any component part thereof as being similar or akin to the machinery or systems of the applicants and/or Abbey E Engineering or to be based upon the same technical data and manufacturing procedures.

5.

Granting the applicants further or alternative relief.

6.

That the costs of this application be paid by the respondents jointly and severally.

B.

Alternatively:

1.

An order in terms of paras 1 and 2 above.

2.

F An interdict pendente lite in terms of paras 3 and 4 above.

3.

Further or alternative relief.

4.

Such order as to costs as may appear meet."

The second and third respondents are directors of the first respondent. The case against all three respondents is, in essence, the same and it is G unnecessary in this judgment to make any distinction between the respondents.

The application relates to documents and information dealing with the design, development and manufacture of certain hydraulic lifting devices including work platforms (hereinafter, for convenience, referred to as H "the Abbey devices"). The devices in question are those of an Australian company, Abbey Engineering (Pty) Ltd (hereinafter referred to as "Abbey").

The second applicant is the holder from Abbey of a temporary exclusive licence for the manufacture and sale of the Abbey devices. In terms of the agreement between Abbey and the second applicant the latter is entitled to use confidential information supplied by Abbey to it. The first applicant is the marketing agent of the second applicant with the consent of Abbey.

Goldstone AJ

According to the applicants, when Abbey devices are advertised, simple line drawings are used and there is no attempt to produce accurate details A or drawings. In particular, no technical details are furnished as these are a matter of confidentiality between the applicants and their customers or their distributors or agents. The one exception, say the applicants, in which accurate detail is produced is in the case of a certain technical brochure (hereinafter referred to as "the technical brochure") published by Abbey and in which accurate detail is produced. The technical brochure B has been made available to the first applicant in South Africa. In short, the applicants allege that the technical brochure contains confidential information concerning the Abbey devices and for that reason is not freely distributed by them. It is supplied in confidence to certain distributors, agents and customers.

C In December 1977, so it is further alleged by the applicants, the respondents expressed interest in the Abbey devices and indicated that the first respondent was interested in becoming an agent of the applicants for the distribution thereof. The approach of the respondents was believed to have been bona fide and in consequence thereof certain confidential information was given by the applicants to the respondents. This included D a copy of the technical brochure. The relief to which I have referred is sought by the applicants on the basis of their allegation that the respondents have misused the confidential information thus received by them by manufacturing Abbey devices and selling them as their own.

I have outlined the applicants' case in very summary form. The preliminary matters with which I am now concerned and called upon to decide do not E require a fuller treatment of the detail set out in the somewhat voluminous founding affidavit which runs to some 253 pages.

The notice of motion and supporting affidavits were served upon the respondents in the middle of July 1979. On 15 August 1979 the respondents, by letter from their attorneys, made an offer to settle the matter on the following terms:

F "Without admitting that the applicants are entitled thereto, the respondents are prepared to submit to the order sought excluding para 4.2, 5 and 6 thereof, and also excluding the portion of the prayer set out under 'alternatively'. In respect of para 4.2 of the order sought the respondents require a safeguard of their vested rights, enabling them to continue to manufacture and sell those articles which were manufactured and sold by them prior to the appearance of the applicants on the South African market.

G In the interests of a settlement the respondents are prepared to bear their own costs to date in this matter if the above offer is accepted. If the offer is not accepted the respondents will seek such special award of costs as we may advise.

It is not intended that this communication be regarded as 'without prejudice' and we intend bringing it to the attention of the Court at the hearing."

H This tender was rejected by the applicants and the respondents duly filed their answering affidavit.

In the respondents' answering affidavit reference is made to the tender contained in the respondents' attorneys' letter of 15 August 1979. It is pointed out that had the applicants accepted the tender the respondents would not have incurred any costs after 15 August 1979. The affidavit then continues:

"On the aforegoing grounds the respondents,

(a)

tender an order in terms of prayers 1, 2, 3, 4.1 and 4.3 of the notice of motion;

Goldstone AJ

(b)

pray that the order sought by the applicants in terms of prayers 4.2 and 6 of the notice of motion be dismissed, and

(c)

pray that the applicants be ordered, jointly and A severally, to pay the respondents' costs of this application."

In the light of their tender, the respondents refrained from dealing with the factual basis of the applicants' claim. It is stated that the applicants, on the allegations made in their founding affidavits, have not made out a case for all the relief claimed in the notice of motion but that "for reasons of expediency" the respondents decided to submit to an B order in the terms just quoted. The respondents then set out their reasons for opposing the relief claimed in prayer 4.2 of the notice of motion and the claim for costs.

The application was set down for hearing on 26 September 1979 before BOSHOFF AJP. At that hearing the respondents gave informal notice of their C intention to argue in limine that the applicants did not have locus standi to bring this application. The application was postponed sine die to enable the respondents to give the applicants formal notice and particulars of the point in limine. The costs of that hearing were reserved.

The respondents then filed a formal notice of the point in limine. The D reasons for the attack on the locus standi of the applicants was formulated as follows:

"The applicants have instituted proceedings for the relief claimed in the notice of motion as an exclusive licensee in respect of property owned by Abbey Engineering (Pty) Ltd. As exclusive licensee the applicants have no locus standi to institute proceedings as they have shown no proprietary interest in the subject-matter of the application."

The application was again set down for hearing on 28 November 1979. On the preceding day the respondents served a further set of affidavits upon the applicants in support of an application for leave to withdraw the tender F made by them in their original answering affidavit. In short, that leave is sought for two reasons, viz:

(a)

to enable the point in limine to be raised; and

(b)

in any event to enable the respondents to oppose all of the relief sought...