Waste Products Utilisation (Pty) Ltd v Wilkes and Another
Jurisdiction | South Africa |
Citation | 2003 (2) SA 515 (W) |
Waste Products Utilisation (Pty) Ltd v Wilkes and Another
2003 (2) SA 515 (W)
2003 (2) SA p515
Citation |
2003 (2) SA 515 (W) |
Case No |
Case 98/22057 |
Court |
Witwatersrand Local Division |
Judge |
Lewis J |
Heard |
January 29, 2001 |
Judgment |
September 25, 2001 |
Counsel |
A R Gautschi SC (with W B Pye) for the plaintiff. |
Flynote : Sleutelwoorde G
Trade and competition — Trade — Unlawful competition — Generally — As general H principle, every person is entitled freely to exercise trade, profession or calling in competition with others — Freedom not unfettered — Right to compete not absolute and competition must remain within lawful bounds, otherwise Aquilian action will lie — Wrongful interference with person's rights as I trader constitutes injuria — In order to succeed in action based on unlawful competition, elements of Aquilian action must be proved, including wrongfulness or unlawfulness — Element of unlawfulness might fall into particular category which law has clearly recognised — But unlawfulness not limited to these categories — In determining whether J
2003 (2) SA p516
competition unlawful regard to be had to criteria such as fairness and honesty — Also recognised are unfair A use of competitor's fruits and labour and misuse of confidential information in order to advance one's own business interests and activities at expense of competitor.
Trade and competition — Trade — Unlawful competition — Confidential information — Fiduciary relationship — Law recognises fiduciary relationships which, as matter of law, give rise B to obligation to respect confidentiality of information imparted or received in confidence, and to refrain from using or disclosing such information otherwise than as permitted by law or by contract — Fiduciary relationships giving rise to such legal duties are in some instances based on contracts and in some instances not — Examples of contracts giving rise to such fiduciary relationships and duties are contract between principal and C agent, employer and employee — When relationship based on contract, obligation to respect confidentiality of information imparted or received in confidence generally regarded as term of contract implied by law — Such implied term subject to any different provisions agreed upon by parties — Content of such implied term must necessarily be determined in light of the D provisions of contract as whole — When fiduciary relationship not based on contract, necessary to look to law of delict, and in particular to principles of Aquilian liability.
Trade and competition — Trade — Unlawful competition — Confidential information — Protection of — Confidential information can be protected by means of interdict and/or claim for damages — To succeed with such relief, following must be E established: (i) plaintiff must have interest in confidential information, not necessarily that of ownership — Right not confined to owner, but also lies at hands of person who is in lawful possession of confidential information — (ii) Information must be of confidential nature — Information or processes used by trader or manufacturer fall into several categories: that which F is trivial or easily accessible, and not confidential at all; that which is confidential, but which remains in employee's head and becomes part of own skill and knowledge applied in course of employer's business, such that, on leaving employment, she or he may use skill and knowledge for her or his own benefit in competition with G the former employer, provided that she or he does not take copies of documents or deliberately memorise information before leaving; and specific trade secrets so confidential that they may not be used in competition with former employer — Within context of employer/employee relationship Courts have placed confidential information into two distinct categories, namely (a) trade secrets and (b) other confidential information enjoying H protection — Express term requiring confidentiality not required in employment contract: in appropriate circumstances such term implied by law — Criteria for information to be regarded as confidential set out — Variety of matters may be confidential: information, formula, sketch, design, process as whole or piece of equipment — Mere fact that application or process I very simple solution to problem and may be self-evident once attention drawn to it, does not mean that it is not protectable as being confidential information or secret process — (iii) There must exist relationship between parties which imposes duty on defendant to preserve confidence of information imparted to her or him — Plaintiff may also rely on fact that defendant is her or his trade rival and has obtained J
2003 (2) SA p517
information in improper manner — (iv) Defendant must have knowingly A appropriated confidential information — (v) Defendant must have made improper use of information, whether as springboard or otherwise, to obtain unfair advantage — 'Springboarding' entails not starting at beginning in developing technique, process, piece of equipment or product, but using as starting point fruits of someone else's labour — In terms of springboard doctrine, interdict against use of confidential information may be limited by B duration of advantage obtained, or time saved, by reason of having had access to confidential information — Interdict need not be limited in time where confidential information sought to be protected is trade secret — (vi) Finally, plaintiff must have suffered damage as result.
Evidence — Production and admission of — Admissibility — Evidence obtained C unlawfully — Evidence obtained by unlawfully tapping telephone conversations of opposing party in litigation — Amongst conversations intercepted were those between first defendant and attorney — Recordings indicating defendants tampering with evidence — No reason to doubt authenticity of tape recordings — Furthermore, defendants not challenging D evidence and giving no evidence to gainsay content of transcripts — No reason to suggest that tape recordings unreliable — Courts retaining discretion to admit tape recordings into evidence notwithstanding commission of offence or infringement of constitutional right in obtaining recording — Communications between attorney and client aimed at committing offence not privileged — Plaintiff showing that there were no other means at its disposal to ascertain E what precisely transpired with regard to certain items which were part of subject-matter of case — Despite unlawfulness of plaintiff's conduct in respect of tape recordings, but taking into account attempt on part of defendants' witnesses to deceive Court, tape recordings admissible in evidence. F
Attorney — Privilege — Communications between attorney and client aimed at committing offence not privileged.
Headnote : Kopnota
As a general principle, every person is entitled freely to exercise her or his trade, profession or calling in competition with others. That freedom is not unfettered. The right to compete is not absolute and competition must remain within lawful bounds, otherwise an Aquilian G action will lie. A wrongful interference with a person's rights as a trader constitutes an injuria for which one can bring an Aquilian action if loss has resulted. In order to succeed in an action based on unlawful competition, therefore, the elements of the Aquilian action must be proved. These include wrongfulness, referred to also as unlawfulness. The element of unlawfulness might fall into a particular H category which the law has clearly recognised, such as the making of false representations about a rival trader; passing-off; or intimidating a competitor. But unlawfulness is not limited to these categories. In determining whether competition is unlawful one must have regard to criteria such as fairness and honesty. Also recognised are the unfair use of a competitor's fruits and labour, and the misuse of confidential information in order to advance one's own business I interests and activities at the expenses of a competitor. (At 570G - 571C and 571G - G/H.)
The law recognises fiduciary relationships which, as a matter of law, give rise to an obligation to respect the confidentiality of information imparted or received in confidence, and to refrain from using or disclosing such information otherwise than as permitted by law or by contract. The J
2003 (2) SA p518
fiduciary relationships which give rise to such legal duties are in some instances based on contracts and in some A instances they are not. Examples of contracts which give rise to such fiduciary relationships and duties are the contract between a principal and agent, an employer and employee. When the fiduciary relationship is based on contract, the obligation to respect the confidentiality of information imparted or received in confidence is generally regarded as a term of the contract implied by law. Such an implied term is subject B to any different provisions agreed upon by the parties. The content of such an implied term must necessarily be determined in the light of the provisions of the contract as a whole. When the fiduciary relationship is not based on contract, it is necessary to look to the law of delict, and in particular to the principles of Aquilian liability, in order to ascertain the extent of the legal duty to respect the confidentiality of information imparted or received in confidence. (At 572D/E - H/I.) C
Confidential information can be protected by means of an interdict and/or a claim for damages. To succeed with such relief, the following must be established. (i) The plaintiff must have an interest in the confidential information, which need not necessarily be ownership. It is clear that the owner of confidential information has a right...
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