Value Logistics Limited v Smit

• Jurisdiction: South Africa
• Judge: Mayat J
• Judgment Date: 14 May 2013
• Docket Number: 2013/9906
• Court: South Gauteng High Court, Johannesburg
• Hearing Date: 14 May 2013
• Citation: 2013 JDR 1409 (GSJ)

Mayat J:

THE PARTIES

[1]

The applicant in this matter is a company, which conducts business in the sphere of "retail logistics". The first respondent ("Smit") is a former

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employee of the applicant, who is presently employed by the second respondent, a company named DPD Laser Express Logistics (Pty) Ltd ("DPD"), trading inter alia as Dawn Wing Couriers ("Dawn Wing").

RELIEF SOUGHT

[2]

The relief, which the applicant seeks, is premised upon a covenant in restraint of trade. In seeking to enforce the said covenant, the applicant seeks a final interdict to restrain Smit from:

i)

utilising any confidential information concerning the business affairs of the applicant, which may have come to her knowledge during her employment with the applicant;

ii)

being employed by DPD, either directly or indirectly, for a period of two years from the 8th of March 2013; and

iii)

soliciting or touting for any clients of the applicant, also for a period of two years from the 8th of March 2013.

[3]

It was contended by counsel for the applicant at the hearing of this matter that there were no bona fide disputes of fact, and this matter could accordingly be determined merely on the papers. Be that as it may, the applicant also seeks in the alternative, an interim interdict, substantially in the same form as above, pending the outcome of an action to be instituted by the applicant.

[4]

The applicant further requests the court to direct that a "confidentiality affidavit" containing certain information with documents annexed thereto, not be retained in the court file and be returned to the applicant's attorneys at the conclusion of this matter.

[5]

Even though no relief is sought against DPD, it is cited as an interested party. Both DPD and Smit oppose the present application.

PERTINENT BACKGROUND

[6]

As already indicated, the applicant's core business is described as "logistics" or "retail logistics". The scope of this core business, as

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described in the founding affidavit, relates specifically to warehousing and distribution by the applicant on behalf of chain sores and retail customers, such as Pick 'n Pay, Edgars, Game, etc. The notion of "retail logistics" in the sphere of warehousing and distribution is accordingly explained in the applicant's founding papers on the basis that the applicant specializes in processing deliveries to chain stores as well as retail stores, on behalf of customers, who utilise the applicant's warehousing facilities. To this end, it is not in dispute that the applicant has established "in-houses" in the form of small branches for retail customers at the applicant's premises. Whilst Smit indicates in her answering affidavit that the applicant's monthly turnover was not in her knowledge, it is not in dispute, as stated in the applicant's founding affidavit, that the turnover generated by the applicant from retail customers and chain stores, which have "in-house" branch accounts with the applicant, constitutes some R400 000-00 a month. Thus, Smit does not dispute the assertion in the founding affidavit that such turnover comprises 80% of the revenue stream of the applicant's "logistics" division.

[7]

It is further stated in the founding affidavit that the business of the applicant includes express courier services, including a same day service, overnight delivery, express economy delivery and international courier services.

[8]

After Smit filed an answering affidavit relating to the nature of the business operated by Dawn Wing, it is stated in the applicant's replying affidavit that in addition to the retail component from the applicant's warehouse to retail chain stores, as set out in the applicant's founding affidavit, "logistics" also incorporates a "front door component" for deliveries from the applicant's warehouse to independent stores.

[9]

It is not in dispute that each in-house branch operated by the applicant is fully functional with employees, drivers, computer personnel,

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furniture, computer equipment, trucks, advertising material, packaging, stationary, security, forklifts, pallets and labeling.

[10]

It is common cause that the applicant employed Smit from May 2010, as the branch manager of the applicant's Klerksdorp branch. She was subsequently transferred to Johannesburg, where she was promoted, with effect from the 1st of January 2012 to the position of manager of the applicant's in-house branches. She held the said position in Johannesburg until the 7th of March 2013.

[11]

It is also not in dispute that at the time Smit was initially employed by the applicant in 2010, her employment contract with the applicant included a clause relating to confidentiality as well as a clause relating to a restraint of trade. Specifically, clause 14 of her employment contract made reference to the applicant's confidentiality policy, which was annexed and initialed as an annexure to her employment contract. It is not in dispute that in terms of the said policy, confidential information was defined to include:

"the company's trade secrets and confidential information including, inter alia, but without limiting the generality of the aforegoing, the following matters: the company's systems, data marketing information records, client and price lists, formulae, specifications, photographs, computer programmes, professional secrets, technology, methods and costs of operation, trade secrets, design, know-how, projections, feasibility studies, knowledge of an (sic) influence over the company's customers and business associates, the contractual arrangements between the company and its business associates, the financial details of the company's relationship with its business associates, the financial detail (including credit and discount terms) relating to the company's customers, the names of prospective customers and their requirements, details of the company's financial structure and operating results, details of remuneration paid by the company to various employees and their duties, or any other information of any kind whatsoever disclosed to or obtained by the employee during the course of his/her employment in any manner whatsoever and any other matters which relate to the business of the company and in respect of which information is not readily available to a competitor of the company, or any reference thereto."

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[12]

In terms of clause 15.1 of her employment contract, Smit agreed that by virtue of the nature of her employment with the applicant, she would have confidential information relating to the applicant and would also develop relations with the applicant's customers. Clause 15.2.1 of her employment contract further provided that for a period of two years after the termination of her employment with the applicant for any reason, she would not:

"knowingly be directly or indirectly employed, have an interested (sic) in or be engaged within a radius of 75 kilometers of any of the Company's [the applicant's] business premises with any company, firm or business which competes with the business of the Company; anywhere in South Africa."

In terms of clause 15.2.2 of her employment contract, Smit was also precluded from soliciting or touting for any clients of the applicant or suppliers or other connections of the applicant, nor seek to solicit, tout for or entice away any of the staff for the time being of the applicant.

[13]

Smit's job description as manager of the in-house branches was recorded in a document dated the 1st of March 2012. In terms of the said document, Smit's job specifications and duties included inter alia conducting operational audits of in-house branches; ensuring that the requirements of customers are met; checking standard operating procedures, including those relating to marking and labeling of files and boxes; updating in-house organograms, reflecting herself as the in-house manager; monitoring the cost and supply of stationary utilised at in-house branches; dealing with issues of staffing at in-house branches; enforcing daily site operation meetings; ensuring minutes are taken at meetings with the applicant's customers; ensuring that customer complaints are properly logged; investigating "no charge" requests from customers; ensuring quality control; ensuring that floor walks are done on a regular basis by all customer managers; conducting site operations; assisting with invoicing; checking outstanding credits and claims during customer visits; communicating with customers on a daily basis in respect of all aspects of the supply

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chain; ensuring staff comply with standard operating procedures; visiting the applicant's customers on a regular basis and building relationships with such customers, (The frequency of this duty was specifically stipulated to be "daily"); and setting up internal meetings with all key players at the in-house branches to address and discuss challenges.

[14]

It appears from a document on record that the applicant gave Smit certain monthly incentives and Smit also received performance bonuses in relation to her management goals. Such goals included inter alia "relationship building and increased revenue" as well as "customer retention".

[15]

As regards Smit's obligation to visit the applicant's customers daily, Smit emphasizes that she was required to manage 32 in-house branches. The applicant concedes in this respect that practically speaking she was only able to visit two or three customers a day. The sales director of the applicant further confirms in the founding affidavit that when Smit was promoted, she was introduced to the main contact person at each of the 32 customers for whom the applicant managed in-house branches. Against this background, it is reiterated in the founding affidavit that Smit was required...