Rawlins and Another v Caravantruck (Pty) Ltd

• Jurisdiction: South Africa
• Judgment Date: 24 November 1992
• Citation: 1993 (1) SA 537 (A)

Rawlins and Another v Caravantruck (Pty) Ltd
1993 (1) SA 537 (A)

1993 (1) SA p537

Citation	1993 (1) SA 537 (A)
Court	Appellate Division
Judge	Hoexter JA, Nestadt JA, Kumleben JA, Nienaber JA and Howie AJA
Heard	November 2, 1992
Judgment	November 24, 1992

Flynote : Sleutelwoorde B

Contract — Legality — Restraint of trade — Unreasonableness — Employee restrained from being engaged with employer's suppliers or competitors in certain area for period of two years after termination of employment — C Employee upon termination of employment taking up position with competitor in same area selling same product mostly to same customers — Employee alleging that restraint was unreasonable (1) because employer had no proprietary interest requiring protection in that employee, during his employment with employer, dealt not with employer's existing customers but D with his own pre-existing following or buyers whom he later found and (2) that it was too wide as to time — As to (1), because onus on employee to prove unreasonableness of restraint, up to him to show that he never acquired any significant personal knowledge of or influence over persons he dealt with as a salesman of applicant, over and above what previously E existed — Even though persons to whom employee sells and whom he canvasses previously known to him and in this sense 'his customers', he may nevertheless during employment form attachment to and acquire influence over them which he did not have before — In such cases, created or enhanced customer goodwill at least in part an asset of employer — In F casu employee merely stating that he had taken his existing customers when joining applicant and not alleging that he did not acquire significant personal knowledge of or influence over and above what previously existed — This is not sufficient — As to (2), although two year period close to G limit of what would be reasonable, employee a salesman with particular expertise and, bearing in mind limited area of restraint, enforcement of restraint of two years not appreciably inhibiting employee's ability to earn a living — Limit under circumstances not unfair — Employee not discharging onus of proving unreasonableness of restraint.

Headnote : Kopnota

H The respondent, which carried on business from premises in East London as a distributor of decorative automobile and industrial paints, engaged the first appellant as a sales representative. In terms of the contract of employment the first appellant was prohibited 'from being engaged directly or indirectly with our suppliers or competitors in the Eastern Cape, Border, Transkei and Ciskei, for a period of two years' after termination of his employment (the restraint clause). After about 15 months the first appellant terminated his employment and immediately took up a position as a salesman with the second appellant, C Ltd, which also carried on I business in East London selling the same brand of paint as the respondent, mostly to the same customers. In the result the first appellant began calling on and selling paint to persons whom he had previously dealt with when working for the respondent. The respondent, relying on the restraint clause, brought an urgent application in a Provincial Division against the first appellant and C Ltd, claiming an order interdicting the first appellant inter alia from working for C Ltd in the area specified in the J restraint

1993 (1) SA p538

A clause and from 'contacting and/or soliciting' any of respondent's customers as at the date of termination of the first appellant's employment. The first appellant opposed the application on the basis that the restraint was unreasonable and therefore unenforceable. The Court a quo rejected this contention and substantially granted the relief sought. The first appellant's case was that the respondent had no proprietary interest which required protection, and in particular that no misuse of B its trade connections was involved. According to the first appellant this was because he had, during his employment with the respondent, largely dealt with his own pre-existing following or buyers whom he had later found, and not with the respondent's existing customers. On appeal,

Held, that the fact that the first appellant did not deal with the respondent's existing customers during his employment with the respondent was a factor in the first appellant's favour, but not conclusively so: C even though the persons to whom an employee sells and whom he canvasses were previously known to him and in this sense 'his customers', he may nevertheless during his employment, and because of it, form an attachment to and acquire an influence over them which he never had before.

Held, further, that where this occurred, the customer goodwill which was created or enhanced was at least in part an asset of the employer.

Held, further, that, the onus being on the first appellant to prove the D unreasonableness of the restraint, it was for him to show that he never acquired any significant personal knowledge or influence over and above that which previously existed, over the persons he dealt with as a salesman of the respondent.

Held, further, that the first appellant had made no allegation that he did not acquire such knowledge or influence, nor could such a thing be inferred - on the contrary, it appeared no less probable that the first appellant's relationships with the customers he dealt with as a salesman E of the respondent were such as to make it reasonable for the respondent to protect itself.

Held, further, that it was a fair inference in the circumstances that it was the first appellant's employment with the respondent that gave him the opportunity to consolidate or even strengthen the prior rapport he had had with his customers.

Held, further, as to the question whether the duration of the restraint was unreasonably long (no attack having been made on the reasonableness of F its area), that, although a period of two years was close to the limit of what would be reasonable in this type of case, one had to bear in mind that the first appellant had a particular expertise and that the restraint applied to a limited area, in the light of which it did not seem that the enforcement of the restraint would appreciably limit his ability to earn a living: accordingly, and on a conspectus of all the facts, the two year period was not unfair.

Held, accordingly, the allegations by the first appellant being insufficient to show either that the respondent was not entitled to G protection or that the restraint was unreasonably wide, that he had failed to prove that it was unenforceable. Appeal dismissed.

The decision in the Eastern Cape Division in Caravantruck (Pty) Ltd v Rawlins and Another confirmed.

Case Information

Appeal from a decision in the Eastern Cape Division (Van Rensburg J). H The facts appear from the judgment of Nestadt JA.

R P Hoffman for the appellants referred to the following authorities: Tamarillo (Pty) Ltd v B N Aitken (Pty) Ltd 1982 (1) SA 398 (A) at 430G-431A; Plascon Evans Paints (Pty) Ltd v Van Riebeeck Paints (Pty) Ltd I 1984 (3) SA 623 (A) at 634H-635C; Ngqumba en 'n Ander v Staatspresident en Andere; Damons NO en Andere v Staatspresident en Andere; Jooste v Staatspresident en Andere 1988 (4) SA 224 (A) at 259C-263D; Amalgamated Retail Ltd v Spark and Another 1991 (2) SA 143 (E) at 145F et seq; Magna Alloys and Research SA (Pty) Ltd v Ellis 1984 (4) SA 874 (A); Sunshine Records (Pty) Ltd v Frohling and Others 1990 (4) SA 782 (A); Book v Davidson 1989 (1) SA 638 (ZS) at 640; Petre & Madco (Pty) Ltd t/a T-Chem v J Sanderson-Kasner and Others 1984 (3) SA 850 (W)

1993 (1) SA p539

A at 858C; U-Drive Franchise Ltd v Drive Yourself Ltd and Another 1976 (1) SA 137 (D) at 141H-145A; Brink Broers Ltd t/a Logans Sports v Horn (unreported, CPD case No 13406/85); Bonnet and Another v Schofield 1989 (2) SA 156 (D) at 160A; Highlands Park Football Club Ltd v Viljoen and Another 1978 (3) SA 191 (W) at 198E; Baart v Malan 1990 (2) SA 862 (E) at B 867C.

A J G Lang for the respondent referred to the following authorities: Recyclying Industries (Pty) Ltd v Mohammed and Another 1981 (3) SA 250 (E) at 258G-H; Drewtons (Pty) Ltd v Carlie 1981 (4) SA 305 (C) at 314F-G; Poolquip Industries (Pty) Ltd v Griffin and Another 1978 (4) SA 353 (W) at 362C-E; Brink Brothers t/a Logans Sports v Horn (unreported, CPD case No C 13406/85); Petre...