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REPORTABLE

IN THE HIGH COURT OF SOUTH AFRICA

(EASTERN CAPE DIVISION)

CASE NO: EL 201/2005

ECD 681/2005

In the matter between:

HOTEL RESERVATIONS WORLDWIDE

(PTY) LTD Applicant

and

NATALIE CORINNE RISTOW Respondent

KAT LEISURE (PTY) LTD Second Respondent

Coram: Chetty, J

Date Heard: 12 May 2005

Date Delivered: 26 May 2005

Summary: Final interdict – restraint of trade – analysis – no ground for granting relief

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JUDGMENT

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CHETTY, J

[1] This is a matter which, shorn of the complexities foisted upon it, an application for a final interdict to enforce clauses in a letter of appointment and a pro-forma document titled “Agreement Regulating Restraint of Trade (the pro-forma document), which the applicant contends are covenants in restraint of trade. Subject to what follows hereinafter relating to the locus standi of the applicant the factual scenario, succinctly stated is as follows. The applicant forms part of a group of companies with its registered office and principle place of business in East London. A central figure is its managing director one Vyadislav Nassimov, to whom I shall for ease of reference refer to as Nassimov. The Regent Hotel, Suites and Conference Centre (the Regent Hotel”) situate on the beach front at East London forms part of the group and concentrates on attracting business from the government and the corporate sector in regard to the hosting of conferences, seminars, trade shows and exhibitions. The first respondent was appointed by Nassimov as a sales representative for Premier Hotels/ Concord Travel with effect from 3 May 2003 at a monthly remuneration of R6000.00 per month. On her appointment she signed a letter addressed to her by Nassimov on a letterhead of the Regent Hotel, containing a number of clauses to which I shall in due course refer to. The second respondent, Kat Leisure, is a direct competitor of the applicant operating a number of Hotels on the same beach front in East London. The respondent resigned from her employment with the applicant on 23 February 2005 and thereafter commenced employment with the second respondent. No relief was sought against the second respondent nor has it filed any papers in opposition to the application. The ambit of the dispute is thus confined to the applicant and the first respondent and I shall thus refer to her as the respondent.

[2] The relief sought by the applicant was amended during the hearing and the order now sought is for a final interdict – (i) “restraining (the respondent) until 22 March 2006 from being employed by the second respondent” and (ii) “until 22 March 2006 from carrying on, being interested in or engaged in or be concerned with any company, firm or close corporation involved in the marketing and sale of accommodation and conferencing facilities within a 100 km radius of the Regent Hotel, East London, alternatively within the magisterial district of East London”. The primary relief sought is predicated upon the provisions of the letter of appointment referred to and, the secondary, on the pro-forma document. In view of the conclusion reached in regard to the aforementioned it is unnecessary to consider the additional relief sought as a further alternative viz the referral of alleged factual disputes for the hearing of oral evidence. I shall henceforth, to avoid confusion refer to the letter of appointment as SN1 and the pro-forma document as SN2. It is common cause that as regards the latter the document is unsigned.

[3] Two issues however arise for decision at the outset, viz urgency and the applicant’s locus standi. In regard to the former, I am satisfied that whatever delay there may have been in launching the application, that does not, per se, warrant a dismissal of the application. Nothing more needs to be said on this score.

Locus Standi

[4] The applicant’s locus standi to enforce the restraint was placed in issue by the respondent. The adoption of such a stance unleashed a plethora of venomous epithets. The respondent was castigated as being disingenuous, untruthful and of attempting to mislead the court. There is no justification for these unwarranted denunciations. It is apparent from the papers that the restructuring of various companies and entities in the group of which the applicant formed part occasioned confusion not only to employees of the various entities but to its management as well. What is to be gleaned therefrom is that following upon the restructuring the applicant stepped into the shoes of Premier Hotels (Pty) Ltd and, save for the change of name, business continued as before. The rights and obligations of the parties remained unaffected. It was only when the supplementary affidavits of the applicant’s managing director, Nassimov, and it’s accountant, Mr Birch was filed that some clarity emerged in regard to the applicant group’s restructuring. Prior thereto, uncertainty reigned and it can hardly be contended that the respondent’s reluctance to admit that the applicant became the successor in title to Premier Hotels (Pty) Ltd was in any way opportunistic.

The Letter of Appointment

[5] The operative clauses in the letter of appointment (SN1) and upon which the applicant relies as constituting covenants in restraint of trade are clauses 11 and 16 which read as follows:

“11. CONFIDENTIALITY

You shall not at any time divulge to any person any trade secrets or any other confidential information regarding the Hotel’s business or affairs, nor that of any of its Associates, without the Hotel’s written consent.”

and

“16. RESTRAINT OF TRADE

You will be required to sign a “Restraint Agreement” that will restrain you from taking up employment in a hotel or similar establishment within a 100km radius of the Regent Hotel. This agreement will come into effect within 30 days from the date of termination of your employment and will remain in force for a period of one (1) year.”

[6] In regard to the latter, Mr Quinn who, together with Mr Taljaard, appeared for the applicant submitted that by appending her signature to SN1, the respondent accepted the terms and conditions reflected therein and bound herself to what counsel contended was a covenant in restraint of trade. He submitted further that the applicant would not have considered appointing the respondent if she was unwilling to sign what he termed “the restraint apparent from clause 16” of SN1.

[7] Clause 16 does not lend itself to the interpretation contended for on behalf of the applicant. Contextually the word “will” connotes a future event. It envisages the conclusion of an agreement in restraint of trade at some unspecified future date which, upon signature, would preclude the respondent from taking up employment in a hotel or similar establishment.

[8] Had the drafters of SN1 intended that pending the conclusion of the envisaged agreement in restraint of trade the restraint would nonetheless be operative, the inclusion of words to that effect would have been easy. Upon a proper construction of the clause it is clear that the appointment was provisional in the sense that it would be followed by negotiations on essential terms and, until resolved and agreed upon, the provisional agreement would be of no force and effect.

[9] Mr Quinn submitted further that irrespective of an adverse finding in regard to the aforegoing, the respondent was nonetheless bound by the provisions of clause 11 of SN1 and that the applicant was entitled to an appropriate order. The difficulty with this submission is two-fold. In the first place, during argument, Mr Quinn expressly abandoned the relief foreshadowed by clause 11 but, more importantly, there is a dearth of evidence to substantiate the vague allegations that the respondent breached clause 11.

[10] The secondary basis for the relief sought rests on the premise that an agreement in restraint of trade was concluded in the terms embodied in SN2. It is the applicant’s case that Nassimov personally handed the respondent the document with the request that she peruse, sign and return it to either himself or its human resources department. He stated that he thereafter, on several occasions, enquired of the respondent whether she in fact signed SN2 and to which she replied in the affirmative adding that she had handed it to the human resources department.

[11] Nassimov’s averments as aforesaid were refuted by the respondent. She denied ever having seen or heard of SN2. Mr Quinn however, sought to impugn the respondent’s credibility by attempting to show that ex facie her replying affidavit she was aware of the existence of SN2 and had in fact been provided with it by Nassimov. Mr Quinn referred to various passages in the affidavit of the respondent in support of his contention that the respondent was aware of SN2 and its terms. He referred to paragraphs in her affidavit to the effect that it was she who had reminded Nassimov that she had not signed any such agreement as constituting irrefutable proof that she was at all times aware of the existence of such an agreement. The argument is superficially attractive and the various paragraphs in the respondent’s affidavit relied upon, read out of context, would seem to support the submission. However, on the applicant’s own version he had drawn the respondent’s attention to what he termed were “the consequences of her resignation” which viewed holistically could only have referred to what he believed to have been a restraint of trade agreement. The respondent’s response to these allegations can scarcely lend itself to the suggestion that she knew of the existence of SN2.

[12] It was further submitted that it is evident from the supplementary affidavit of Anele Lahle that the respondent’s disavowal of any knowledge of SN2 is patently untrue. I am far from persuaded that any reliance whatsoever can be placed upon the evidence of Ms Lahle. According to her, she was the person who conveyed to Nassimov that the respondent had been in contact with government officials in Bisho. On the applicant’s version she conveyed such information to him on different occasions during March and April 2005. This information was of such importance that he felt compelled to convey it to his attorney with the request that counsel’s opinion be sought. These averments in the supplementary affidavit, in response to the respondent’s denial of any knowledge of SN2 smacks of collusion with Nassimov. It was germane to the applicant’s case and its glaring omission from Ms Lahle’s confirmatory affidavit ineluctably compels the conclusion that it is a fabrication.

[13] It is furthermore inconceivable that the respondent whose dissatisfaction with the applicant arose primarily because of the favoured status bestowed upon her understudy Mrs Lahle, would have sought legal advice from the latter. In my view the inclusion of the information in a supplementary affidavit is clearly opportunistic. In any event, on the applicant’s own version there appears to be much uncertainty as to when SN2 was handed to the respondent. In the founding affidavit Nassimov avers that it was handed to her a few months after her appointment whereas in his replying affidavit alleges that it was done in March 2004, i.e. almost a year after the respondent’s appointment. Had SN2 in fact been handed to the respondent then reference thereto would have been made in the various letters sent to her after her resignation. Its absence reinforces the respondent’s contentions that she was unaware of its existence. Consequently, and apropos the test which has to be applied in cases of this nature (see Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd [1984] ZASCA 51; 1984 (3) SA 623 (A) at 634 H-I), I accept the respondent’s version that she at no time prior to tendering her resignation was either appraised of the existence of SN2 or provided with a copy thereof.

[14] In the circumstances I remain unpersuaded that the applicant has satisfied the requirements for the grant of the relief sought. As far as costs are concerned the parties are in agreement that the costs of the aborted hearing in East London are to be included in any costs order.

[15] In the result the following order will issue:

1. The application is dismissed with costs such costs to include the costs of the abortive hearing on 3 May 2005, and all such costs are to include the costs of two counsel.

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D. CHETTY

JUDGE OF THE HIGH COURT

Obo the Applicant: Adv Quinn / Adv Taljaard

(instructed by Smith Tabata c/o Whitesides Attorneys)

Obo the Respondents: Adv Lowe / Adv De La Harpe

(instructed by Kirchmann’s Inc c/o Nettletons Attorneys)

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