Meljo Pan Africa (Pty) Ltd v Rossouw and Others (120904-2024) [2024] ZAGPJHC 2071 (20 December 2024)

Meljo Pan Africa (Pty) Ltd v Rossouw and Others (120904-2024) [2024] ZAGPJHC 2071 (20 December 2024)

REPUBLIC OF SOUTH AFRICA

 

 

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG LOCAL DIVISION, JOHANNESBURG

 

 

Case Number: 120904-2024

Shape1

(1) REPORTABLE: YES / NO

(2) OF INTEREST TO OTHER JUDGES: YES/NO

(3) REVISED: YES/NO

______________ _________________________

DATE SIGNATURE

 

 

 

 

In the matter between:

 

 

 

 

In the matter between:

 

 

MELJO PAN AFRICA (PTY) LTD First Applicant

 

(Reg. No.: 2016/161588/07)

 

and

 

QUINTON ALEXANDER ROSSOUW First Respondent

(ID. No.:[…])

MIMNESKO ENTERPRISES (PTY) LTD Second Respondent

(Reg. No.: 2014/034412/07)

QUINTON COETZEE Third Respondent

(ID. No.: […])

KERRY PIPER (PTY) LTD Fourth Respondent

(Reg. No.: 2015/136682/07)

 

 

JUDGMENT

 

 

WENTZEL AJ

 

 

Introduction

[1] This application was brought by way of urgency seeking to interdict the first and second respondents from disclosing any confidential information relating to the applicant to any third party and/or from making use of such information, for the respondents’ own benefit, or for the benefit of a third party.

[2] In particular, the applicant seeks an Order:

a. interdicting the first and second respondent from disclosing and/or using any of the confidential information of the applicant relating to: a) the applicant's customer lists; b) the applicant's customer requirements and specific feedback; c) the specific products that the applicant supplies to its customers; d) the recipes of the applicant's products: e) the costing and pricing structures of the applicant; and t) samples and projects of the applicant.

b. interdicting the first and second respondents from disclosing and/or using any of the information contained in the e-mails described in the founding affidavit; and

c. interdicting the first and second respondents from approaching, contacting or soliciting the clients of the applicant as per annexure -NOM1" to the notice of motion.

d. directing the first and second respondents to delete and permanently remove any confidential information relating to the applicant from any device or online storage platform on which the first respondents transferred, received or stored the confidential information and granting the applicant’s attorney access to such devices and online storage platforms to ensure that this is done.

[3] The relief sought against the third and fourth respondents was settled between the parties.

The issues in dispute

[4] Apart from the question of urgency, there are essentially two issues in dispute: the first is whether or not the products which the first respondent has sought to market and sell to the applicant’s clients are distinct from those marketed and sold by the applicant to them or whether they are in essence the same product sold under a different name or in a marginally altered form so as to appear to be a different product to that which the applicant supplies to these customers whereas it is in essence, substantially the same product. The second is who owns the intellectual property attaching to the recipes for the spice products which the applicant supplies to its customers.

Background

[5] This is in essence a family dispute between first respondent, Quinton Alexander Rossouw (“Rossouw”) and his sister- in law (Luzita Haasbroek (“Haasbroek”)) over the intellectual property rights to the family business started by Haasbroek’s father, Johan Deysel (“Deysel”) (who is Rossouw’s father-in-law as he is married to Haasbroek’s sister).

[6] During or about 2015, Rossouw’s father-in-law started a spice business which he operated through a close corporation, Meljo Enterprises CC. During 2020, Meljo CC was converted into a private limited company, Meljo Enterprises (Pty)Ltd (“Meljo Enterprises”). Following the liquidation of Meljo Enterprises during 2023, the business has been conducted through the applicant company, Meljo Pan Africa (Pty)Ltd (“Meljo Pan Africa”) which is now run by Rossouw’s sister-in-law, Haasbroek, who is its Chief Executive Office (“CEO”). For convenience this latter company will be referred to as “Meljo”.

[7] At all material times, the various entities trading under the name “Meljo” have developed and produced various unique spice blends to well-known meat suppliers. Meljo also started importing and supplying various functional foods ingredients, raw food ingredients, casings and creamers. It is primarily the spice blends that form the subject matter of the current application.

[8] Rossouw commenced his career in the food industry at Crown National where he met his future father-in-law and his brother Wynand Dyssel (“Wynand”), who Rossouw states also specialised in the development of mostly spice blends and recipes.

[9] After leaving Crown National during 2013, Rossouw was offered a consulting position at Meljo by Dyssel. Rossouw maintains that he was recruited by Dyssel primarily for his knowledge and experience that he had attained at Crown National in relation to spice blends and recipes. Wynand also at some stage left the employment of Crown National and became a consultant to Meljo Enterprises as well as other companies. Rossouw insists that when he and Wynand consulted for Meljo Enterprises, they “collectively had literally hundreds of recipes which included spice blend recipes”. Rossouw claims that these recipes were used as a base to develop other recipes for Meljo Enterprises.

[10] Rossouw states that he continued to work informally for Meljo after the liquidation of Meljo Enterprises . However, on 1 August 2023, a Consultancy Contract between Meljo and Mimnesko was concluded. Meljo states that Rossouw’s consultancy agreement was a fixed term contract that expired on 31 March 2024, although this does not appear from the 1 August 2023 contract. Be that as it may, Meljo alleges that pon the expiry of Rossouw’s consultancy agreement, Rossouw and Meljo entered into negotiations to conclude new consultancy contract, but the terms could not be agreed. Apparently Rossouw no longer wanted to be a consultant of Meljo and wanted to become a distributor of Meljo's products under the name of Rossouw’s company, Mimnesko Enterprises (Pty) Ltd (“Mimnesko”) (the second respondent in this matter). Meljo rejected this proposal as it would lead to the goodwill and brand recognition of Meljo being used by Mimnesko to the prejudice of Meljo.

[11] Rossouw, on the other hand, states that, although nothing was ever formalized, Dyssel required him to invest his knowledge into his business for a period of 10 years on the understanding that he would receive shares in the business. This, however, did not materialise and Rossouw believes this was the catalyst for the souring of the relationship between him and Haasbroek and resulted in his severing ties with Meljo at the end of March 2024.

[12] Meljo contends that since they severed ties with Rossouw, he has been unfairly competing with it through Mimnesko by utilising its trade secrets and confidential information in order to do so.

The filching of Meljo’s confidential information by Rossouw

[13] It is apparent that prior to his departure from Meljo, Rossouw had already conceived the plan of utilising Mimnesko to compete with Meljo. During the period that Rossouw consulted for Mejo, Rossouw had always invoiced the sales he concluded on Meljo’s behalf through Mimnesko.

[14] During September 2024, certain email communiques between Rossouw, Mimnesko, Quinton Coetzee (“Coetzee”), the third respondent and a former employee of Meljo, and Kerry Piper (Pty) Ltd (“ Kerry Piper”), the fourth respondent and a competitor of Meljo, came to the attention of Meljo. The content of these communiques prompted Meljo to bring an Anton Pillar application which was granted and permitted the applicant to seize the first respondent’s laptop. Examination of Rossouw’s laptop revealed that:

a. On 29 November 2023, Rossouw provided feedback to Meljo regarding the projects he was busy with in the form of an Excel-spreadsheet, titled “Client Feedback”, containing all the projects Meljo was involved in with its clients and the steps necessary to be taken to complete the projects.

b. On 4 December 2023, Rossouw sent himself the aforementioned spreadsheet.

c. On 5 February 2024, Rossouw sent himself an Excel spreadsheet containing customers he was instructed to contact by Meljo. However, to this spreadsheet he added the details of customers not falling within his mandate.

d. On 19 February 2024, Rossouw transferred the entirety of the contents of his work laptop to his personal laptop at his home. Amongst the information transferred was Meljo’s entire recipe book containing 560 confidential spice recipes supplied by Meljo to its customers and an Excel-Spreadsheet containing the product formulation and costing of every single one of Meljo’s recipes and samples.

[15] This confidential information was then forwarded by Rossouw to Mimnesko’s email address.

[16] Rossouw admits having transferred Meljo’s confidential information and client lists to his personal computer at his home but seeks to explain that this was done as there were problems with the computer at work and states that the Information Technology (“IT”) specialist at Meljo assisted him in doing this. No confirmatory affidavit was obtained from this IT specialist to confirm this.

[17] Rossouw states:

It was only on two occasions that I mailed information to "myself", I say this in quotes as I mailed them to my other e-mail address in an attempt to transfer the relevant information from one computer, that of the Applicant, to my personal computer which I utilised from working from home.

Both instances occurred while I was still with the Applicant and during a time where I did not envisage that our bounds will be severed.

The first of the two instances was when my Meljo computer was experiencing difficulties and the IT representative of Meljo assisted me in the transfer of information from the one computer to the other. The Second was when my Meljo Computer completely crashed down. The same IT rep then assisted me to transfer the entirety of the contents of that computer to my personal computer. In this instance I started sending files to the other computer one by one, the IT rep then assisted me to send everything in one message.”

[18] Rossouw maintains that the spreadsheet containing the details regarding Meljo’s projects was created by him and it was done as a summary of the projects that he was busy with to keep Meljo Enterprises and the Applicant “in the loop thereof.” He states that:

The projects listed in this Annexure [were] effectively abandoned by myself when I left the Applicant and I have not since then taken any action in, or in respect of, these projects.”

[19] Although Rossouw signed a restraint of trade agreement on 8 March 2018 and a confidentiality and non-disclosure agreement on 18 March 2018 with Meljo Enterprises CC. These agreements were, however signed in favour of Meljo Enterprises CC and not Meljo Enterprises (Pty) Ltd or Meljo. The Consultancy Contract dated 1 August 2023 contained a clause providing that the “Consultant agrees to keep all information relating to the Client confidential, and to use such information only for the purposes of providing the Services.” Rossouw stressed that he refused to sign this agreement because of the confidentiality clause. However, a signed copy of the agreement was attached to Meljo’s replying affidavit .

The poaching of Meljo’s customers by Rossouw

[20] Shortly after severing his ties with Meljo, Rossouw approached several of Meljo’s customers and sought to market and sell similar, if not the same products, to Meljo’s customers though Mimnesco.

[21] Rossouw disputes this and insists that he is selling different spice products to that of Meljo which he has been able to develop through his many years of experience in the food industry and during his employment at Meljo.

[22] Although Rossouw accepts that Meljo Enterprise is to be recognised as the owner of the recipes he sent himself, he claims that he developed them whilst consulting for Meljo Enterprises. Rossouw further claims that Meljo is not the owner of the base recipes which he, or Wynand, or any other entity, entrusted to him before he joined Meljo. He disputes that Meljo is the owner of any recipes which he has developed from these base recipes utilising what he says is the vast experience in the industry that he attained over the years.

Urgency

[23] Meljo alleges that it “will not be able to obtain substantial redress at a hearing in due course because the respondents are actively misappropriating its confidential information. Should the conduct of the respondents continue unabated, the applicant will have suffered loss of custom and client which it will not be able to recoup with an application or action in the ordinary course,” as contemplated in East Rock Trading 7 (Pty) Ltd v Eagle Valley Granite (Pty) Ltd and Others (II/33767) [2011] ZAGPJHC 196 (23 September 2011) at paragraph [7]:

[24] Rossouw argued that the application was not urgent as he had tendered not to supply products to Meljo’s clients which the applicant supplies to them. Rossouw’s prior conduct, however, justified Meljo mistrust that Rossouw would abide by this undertaking.

[25] On 2 September 2024 Meljo’s attorneys sent a letter of demand to Rossouw and Mimnesko relying on the confidentiality agreement and restraint of trade agreement concluded between Rossouw and Meljo Enterprises CC. In this letter Meljo’s attorney demanded that Rossouw and Mimnesko provide written undertakings and/or confirmations, by close of business, Wednesday, 4 September 2023 that they will:

a. honour the Confidentiality Agreement(s), specifically the provisions regarding confidentiality and restraint of trade as referred to above;

b. cease and desist from using any of our client's confidential and proprietary information;

c. immediately delete/destroy any and all of our client's confidential and proprietary information that is in your possession, being inter alia client list, customer names and details, providing written confirmation thereof;

d. immediately cease and desist from soliciting and/or poaching the clients/customers/suppliers and/or employees of our client, including but not limited to the specific clients listed therein;

e. immediately cease and desist from unlawfully competing with our client; and

f. refrain from unlawfully competing otherwise with our client in future.

[26] Meljo’s attorney threatened to bring an urgent application should the required undertakings not be provided.

[27] Mimnesko responded by email on 2 September stating, inter alia, that:

In my personal capacity I have been in the food and spice industries for the past 26 year in which I have gain[ed] knowledge and technical expertise in various field within the food industry. I am a qualified food technologist through AIB International. Due to my years of training and experience I have acquired knowledge that is my Intellectual Property. After years in the industry I joined Meljo Enterprises in 2014 with my knowledge and experience, on invitation from Mrs Haasbroek father, the founder of Meljo Enterprises.

I deny being in contravention of any confidentiality and restraint obligations, be it contractual or by common law and suggest that your client provide you with all the facts. I confirmed that during the course of this employment // consulting with Meljo Enterprises, which has been liquidated , I had access to and would be entrusted with important details and aspects of the Meljo's Enterprises business, including the manner in which it operates as well as other confidential information but I have never disclosed any important details, confidential information or trade secret to any person nor have I used it for any purpose other than those of the Company.”

[28] Rossouw also denied any allegations that “we have disclosed proprietary information of your client without permission; “ any deliberate and purposeful attempts to solicit and persuade any customers of your client; ” and stated that “we have never engaged with and are not actively working with a direct competition [competitor] of your client in regards to any product your client supplies in the market.”

[29] The denials made by the first and second respondent were false as the evidence found on Rossouw’s private laptop which had been seized pursuant to an Anton Pillar Order, which was made final with the consent of Rossouw, demonstrated that Rossouw was indeed filching Meljo’s confidential information, approaching the applicant’s clients with a view to supplying the same or similar products to them and engaging Meljo’s competitors to assist him in doing so.

[30] These revelations prompted Meljo to bring the current application as a matter of urgency. I am of the view that Meljo was justified in proceeding with the application despite the undertaking provided by Rossouw.

[31] The undertaking itself is carefully worded: Rossouw states that he will not, nor has he “approached the clients of the Applicant to market or sell any of the Applicant’s products.” This undertaking has been repeated by Rossouw on numerous occasions in his answering affidavit where he has stated that he will “not contact any of the clients of the Applicant to market or sell, products which the applicant sells to them.” It is implicit in these statements that Rossouw may approach Meljo’s clients to market and sell other products not marketed and sold by Meljo to them. Despite the evidence to the contrary, it is apparent from Rossouw’s answering affidavit that he disputes that he has supplied or attempted to supply the same or substantially similar products supplied by Meljo to its customers to them; where he has had to concede that the product supplied or he has tried to reproduce is one supplied by Meljo, Rossouw has denied that Meljo has a proprietary claim to such products. The undertaking provided would thus not provide the required protection sought by Meljo and would open the door to numerous further disputes as to whether the terms of the undertaking had been breached or not.

The merits

[32] In these proceedings Rossouw has sought to justify his actions as set out below.

Consent

[33] Rossouw states that after Meljo did not renew his consultancy agreement he continued, with the knowledge and consent of Haasbroek, as the Chief Executive Officer of Meljo, to market and sell their products. In support of this claim, Rossouw attached screenshots of WhatsApp messages and voice notes exchanged between himself and Haasbroek.

[34] It is clear from the WhatsApp messages attached by Rossouw that hereafter, Haasbroek decided not to continue supplying Rossouw as Haasbroek stated that:

its best if we don’t mix business and family again it’s the best decision for the family at this point. Hope you understand.”

[35] After determining that Rossouw had approached one of Meljo’s customers, Haasbroek sent Rossouw a WhatsApp message expressing her displeasure:

Hi Q

MW Springs het gebel en sock hulle stock en labels. Ek is nie baie happy oor dit nie. Ek het regtig gehoop jy gaan nie by Meljo se kliente rond krap met die selfde proedukte as ons nie. Lekker dag.”

[36] The very evidence thus relied upon by Rossouw refutes that he continued to supply Meljo’s products to its customers with Meljo’s consent.

Recipe development and blending

[37] Rossouw insists that through his extensive knowledge, he developed the recipes he has supplied to Meljo’s customers and provided to Meljo’s competitors as set out earlier in this judgment. Where this has not been the case, Rossouw states that these recipes were developed by Wynand and/or are not the intellectual property of Meljo.

[38] Meljo denies this and insists that Roussouw was never involved in recipe development as this has always been within the domain of Meljo’s Product Development division. Meljo point out that Rossouw was employed as a sales representative who was required to:

a. Receive and process orders from the applicants clients;

b. Market and promote Meljo’s products to new existing client;

c. Provide Meljo’s clients with pricing of products;

d. Conduct planning for the production and delivery of Meljo’s products;

e. Find new client leads and establish new client relationships;

f. Assist with the caring and inspection of products for export; and

g. Arrange transport for local and export deliveries of Meljo’s products.

[39] Rossouw admits that he was “not responsible for planning, blending, and inspection.” But he states that he was at all times, not only privy to the blending sheets, but also, in most instances, the author thereof. He states:

Most blending sheets however have its origin with either myself, Wynand, or the third Respondent as already alluded to.

I was at all times, not only privy to the blending sheets, but also, in most instances, the author thereof.”

[40] Rossouw further states:

The recipes and blending sheets is not only the product of persons, including myself which developed them at Crown National, but also used for such a long period that I practically know them off by heart. It is also very easy to use the spice blends that I have developed and/or become accustomed of over the years to use as a base to amend and improve on in accordance with a specific clients' needs.”

[41] Rossouw also points out that at the time of his departure from Meljo, there was no blender in the employ of Meljo. Support for this is found in the Consultancy Agreement between Mimnesko and Meljo dated 1 August 2023 in which it is stipulated that the services to be provided by Mimnesko were:

 “To build and maintain a minimum Gross Profit of R800,000.00 with a minimum Gross Margin of 25% over the company's product mix. Your estimated Monthly Sales Target is therefore R1,600 000 in order to achieve this. Revised yearly.

To market, promote and sell our specialized blends and to grow the basket at current customers

To gain a minimum of 4 significant new customers in every 6-month cycle.

To service and maintain all designated customers, optimally. This will include regular visits, building a favorable relationship to increase both sales and profits and provide weekly feedback.

Consultant will be responsible for own telesales and communication with customers as of the 1" of August 2023. All orders need to be communicated on the Whatsapp group and not on email.

Consultant will need to be responsible to make own final product and New spice development when needed for customers due to company restructure there will no longer have a person onsite to assist with these requests.

Requesting of all samples need to be logged on the Whatsapp group. .

Consultant to liaise with Thorne Vosloo on customer stock delivery and production time line.” (sic) (emphasis added)

[42] However, blending had not been part of Rossouw’s job description with Meljo Enterprises CC or (Pty) Ltd and it is readily apparent from the terms of his Consultancy Contract with Meljo that Mimnesko was employed as a sales representative of Meljo earning commission on sales concluded by Mimnesko.

The products provided to Meljo’s customers and the recipes provided to its competitors

[43] Meljo insists that Rossouw is supplying their customers with the self-same products produced by Meljo, utlising the confidential information of Meljo. Meljo also complains about the distribution of this confidential information to its customers and its competitors including Excelsior, Eskort, Quicksave Zambia, Senn Foods and Kerry Piper.

[44] The products to which Meljo lays claim which it states Rossouw has sought to reproduce and has supplied to Meljo’ clients are:

a. The recipe for Chakaleka Wors;

b. The recipe for Eskort Wors;

c. The German Russian Concentrate supplied to Quicksave Zambia;

d. The Russian Spice supplied to Senn Foods; and

e. The recipe for Tomato Cocktail Sausage.

[45] These will be dealt with in turn.

[46] The recipe for Chakalaka Wors

a. Excelsior has been a customer of “Meljo” since approximately 2018. Excelsior’s website indicates that Excelsior has expanded its business to include a spice blending facility, essentially offering the same services as Meljo

b. On 6 June 2024 Rossouw, acting on behalf of Mimnesko, sent an email to Excelsior, a customer of Meljo, containing an Excel-spreadsheet titled “Chakaleka David Braaiwors.xlsx and LimpopoChakaleka.xlsx”, which attached a recipe for a product he called “Chakaleka braai pack” . Following this email, Excelsior placed an order with Mimnesko for 2kg of the Chakaleka braai pack. The applicant contends that the recipe sent was essentially the same as that sold by it under the name “Chakalaka Wors” and thus, that Rossouw shared confidential information with one of Meljo’s customers. Meljo, however, concedes that the quantity of the spices differ marginally, but claim that this is because of the extra colourants added to the recipe by Rossouw.

c. Rossouw states that the only dealing he had with Excelsior after he left Meljo is as set out by David Visser (“Visser”), the CEO of Excelsior, dated 30 October 2024. In this letter, clearly provided for the purposes of this litigation, Visser insists that Rossouw has not shared any confidential information with Excelsior and claims that Rossouw was in fact was consulting for them to advance a product which they themself own. Rossouw alleges that the type of consulting that he has done for Excelsior “is exactly on what I have received extensive training at Crown National and that is the only way in which I am proficient to earn a living.”

d. Rossouw contends further that:

I have absolutely no input as to what and how Excelsior's Website are operated, I can only confirm that any reference to Meljo's products would be from the time when they in fact distributed such…I thus deny any involvement, after I have left Meljo, in Excelsiors website, or the contents thereof, and I deny that I have provided Excelsior with any recipes that belongs to the Applicant.

e. In Visser’s letter attached to Rossouw’s answering affidavit he explains that he has a close working relationship with Rossouw and that they have become friends over the years. He sets out the background to the arrangement which existed between Meljo Enterprises (now liquidated), Excelsior and Receive-More and disputes Meljo’s proprietary in the spice recipes. He states:

It came to the attention of EXCELSIOR FOOD & SPICE that MELJO PAN AFRICA is claiming the rights to the recipes that was provided to them during a business transaction entered in between RECEIVE-MORE (PTY) LTD and MELJO ENTERPRISES of which neither, according to my knowledge, exist today, one being liquidated and the other dismantled. By claiming the right to the recipes of the MAX SPICE range, it stands to reason that MELJO PAN AFRICA could only be in possession thereof if they operated outside the legal parameters set by the original legal confidentiality agreement entered into by RECEIVE-MORE (PTY) LTD and MELJO ENTERPRISES.”

f. The fact remains that since Rossouw’s departure from Meljo, Excelsior is blending several of the blends produced by Meljo. The recipes for these blends were sent by Rossouw to himself and the inference is inescapable that these recipes were provided to Excelsior by Rossouw so that it could blend these spices to enable Mimnesko to supply these products to Meljo’s customers and other customers in competition with Meljo.

[47] Eskort Wors

a. On 25 June 2024, Rossouw sent a recipe for a product he called “MEG I” to Coetzee, the director of Kerry Piper, which Meljo maintains is the same as its “Eskort Wors” recipe. Hereafter, Rossouw requested Coetzee to blend the recipe for him so that Mimnesko could supply Eskort, one of Meljo’s customers, with this product. As indicated above, Kerry Piper is a direct competitor of Meljo and Coetzee used to work for Meljo.

b. Comparing the MEG 1 and Eskort Wors recipes side by side, it is evident that their ingredients are the same apart from colourants added by Rossouw. The change in the colour is explained by an email sent by Rossouw to Kerry Piper on 15 April 2024, in which he informed them that the flavour had been approved by Eskort but not the colour. Meljo insist that the colourant in no way impacts upon the flavour and thus reiterate that this is the self-same product supplied by Meljo.

c. Rossouw, however, alleges that the base recipe was obtained from his father-in-law’s brother, Wynand, which he named his “Freys Braai Wors” recipe. He claims that: “We added 500 grams of Chakaleka to the recipe”. Rossouw denies that he “utilised, in any way shape or form, any information that belongs to the Applicant in doing so.”

German Russian Concentrate

d. At Rossouw’s instance, Coetzee blended a recipe he called “WC” which Mimnesko supplied to yet another one of Meljo’s customers, Quicksave. Meljo states this is the exact same recipe as its “German Russian Concentrate” recipe which it supplies to Quicksave.

e. On 18 June 2024, Rossouw sent an email to Coetzee stating that: “Yes the pricing is fine for my local customers. I hope Robby will love the Russian and change over and will pay extra to have it”.

f. In explaining this, Rossouw attaches as Annexure "E" a photograph of the recorded bases from which he states he created the WC concentrate: He states:

These recipes were already created before 2016, long before I have joined the Applicant.

I have thus not forwarded any proprietary information of the Applicant as "WC" may be similar to the Applicants German Russian Concentrate but it is most definitely not the same.

In an attempt to make a living after severing ties with the Applicant, I continue to supply starch to Quicksave.”

g. Rossouw further justifies his actions by explaining that:

After the Applicant's refusal, through my sister in law, to further supply me, I was forced to approach Kerry Piper to supply me with spice mixes.

The Applicant does sell Russian Spice to Quicksave and I do not intend to take over that business, but confirm that Quicksave requested me to create a new Russian flavour as an alternative to the other two companies that supply them.”

h. Rossouw acknowledges that the products mentioned in paragraph 77 of the founding affidavit are provided to Quicksave by Meljo. However he insists that “without utilizing any proprietary information of the Applicant”, he provides them with:

Polony Spice which is manufactured by Kerry Piper utilising a recipe that they own and which I have enhanced utilizing the experience that I have attained over the years.

The basic makeup of a Polony Spice is not hard to attain, but the fine tuning thereof is what requires skill and experience.

It is for that reason that I used the 2016 recipe referenced supra, to create a new spice which Kerry Piper now blends and supply to Quicksave.

I therefore deny that "WC" and "German Russian Concentrate" is the same thing and I deny that the Applicant can lay claim to any exclusivity on the spice which I call "WC".

I also vehemently deny that Annexures "K6" and "K7" makes any reference to Russian Spice.

i. Rossouw complains that Meljo failed to disclose to the Court that Quicksave, as is the case with other clients, purchase three different types of Russian Spice. He states that: “The Applicant provides Quiksave with one of those and I, in an attempt to put bread on the table, am trying to provide the other two, or at least one of the other two to Quicksave.”

j. Rossouw thus admits that he has supplied Quicksave with the spice he calls “WC”. A comparison of the recipes shows that this is virtually identical to that supplied by Meljo to Quicksave. His justification that he has done so “in order to put bread on the table” does not justify his competing unlawfully with Meljo.

[48] Tomato Cocktail Sausage

a. On 15 April 2024, Rossouw sent Coetzee a recipe he named “CTC”, which Meljo states is the same as its “Tomato Cocktail Sausage” recipe.

b. Rossouw, however, insists:

I am not aware, nor was I aware of any client that the Applicant provides a Tomato Cocktail Sausage for.

I have developed a spice blend for this after I have left Meljo and certainly not by using any proprietary and/or exclusive information that belongs to the Applicant.

Although the ingredients may be similar to one of the thousands of recipes that the Applicant has, it may well be similar, if not exact to, thousands of other recipes which have been developed elsewhere and by someone else.

The blending of spice is what I do, if my recipe for baking a cake is similar to the recipe of a renowned Chef, it does not mean that that chef has absolute exclusivity over his or her recipe, or rather in respect of similar recipes.”

[49] Russian Spice

a. Rossouw states that Mimnesko was approached by Senn Foods to supply Russian Spice to them, which he maintains is not one of Meljo’s recipes. Rossouw requested Kerry Piper to provide Mimnesko with a sample which he then requested they adjust.

b. Rossouw’s explanation is that:

Senn Foods approached me to assist them to put a Pork Russian in the market.

Meljo have not, and do not, supply any Pork Russian products to Senn Foods.

As Meljo was no longer willing to supply me with Spices, as I have explained, I had to turn to Kerry Piper to supply me, as they did, with a Spice which they own the recipe for.

I have never forwarded any recipe or example hereof to Kerry Piper on behalf of Senn foods.

ln as far as Kerry Piper may have supplied me with information or samples that may have belonged to the Applicant, I was not aware thereof, and at all times dealt with them as if I was assisting them with their own products.

In all aspects of my dealings with Kerry Piper, I attempted to make a little bit of money by selling their own products, to clients in as far as those products are not sold by the Applicant to those Applicants.(sic)

The information thus so shared between these entities are a direct result of my extensive experience in the industry which I accumulated at Crown National and working with Wynand and Johan Deysel.

To this information, the Applicant has absolutely no right, and nor does the Applicant not have a right to exclude from the possibility to earn a living utilising information that I have developed myself, or obtained long prior to my involvement with the Applicant.”

c. Rossouw repeats that:

As I have stated I was in the process of assisting Senn Foods with putting a Pork Russian in the market and for that I approached Kerry Piper to provide the spice as Meljo were no longer willing to supply me.

And:

Kerry Piper then provided me with a sample of spice and I, in the correspondence under reply, requested them to continue with the supply thereof but to make it bit less spicey, or a little less hot.

d. The spice manufactured by Kerry Piper and supplied to Senn Foods was virtually identical to that provided by Meljo to Senn Foods.

[50] Meljo’s customers

a. On 5 August 2024, Rossouw sent Coetzee a spreadsheet detailing the progress on products to be supplied to a number of Meljo’s clients. It confirms that Mimnesko has been supplying Meljo’s clients in competition with Meljo since July 2024.

b. Rossouw’s explanation is that:

The information thus so shared between these entities are a direct result of my extensive experience in the industry which I accumulated at Crown National and working with Wynand and Johan Deysel.

To this information, the Applicant has absolutely no right, and nor does the Applicant not have a right to exclude from the possibility to earn a living utilising information that I have developed myself, or obtained long prior to my involvement with the Applicant.….

During the existence of Meljo Enterprise and Meljo Pan Africa, the people that did, or rather the only people that could do development was myself, my late father in law, his brother Wynand, and the Third Respondent. [Coetzee]

When I left, there was no food technologist in the employment of Meljo Pan Africa.”

c. Rossouw further explains:

I joined Meljo Enterprises as a sales consultant.

Because of this I, throughout, also sold other food related products to several entities with the knowledge of Meljo Enterprise through the Second Respondent.

It was for this reason that I on several occasions asked Mrs Haasbroek, who is the CEO of the Applicant, as well as my siter in law, for a copy of the Agreement that was concluded in 2018 to ensure that I do not transgress.

d. Rossouw maintains that he was never shown the document. He insists that:

“…it needs to be stated that that the interactions with clients were of the same nature way before I joined Meljo Enterprises and most, if not all of the relationships with these clients were forged during my tenure at Crown National.

My understanding of the respective clients' needs stems solely from the vast experience that I have in the industry.

When I joined Meljo Enterprises, I had intimate knowledge of, and established relationships with a variety of clients.

More so, the existence of entities that sell food products and who need to be supplied with spices, which I do, can easily be ascertained by a simple internet search.”

The legal principles relating to unfair competition

[51] The acquisition and use of a competitor’s trade secrets and/or confidential information amounts to unlawful competition entitling the applicant/plaintiff to an interdict to prevent same.

[52] In the leading decision on unlawful confidential information, Dun and Bradstreet (Pty) Ltd v SA Merchants Combined Credit Bureau (Cape) (Pty) Ltd 1968 (1) SA 209 C Corbett J (as he then was) made it plain that confidential information is protected quite apart from the question of copyright and stated at 221B-222A:

Reverting to the position in our law and without attempting to define generally the limits of lawful competition, it seems to me that where, as in this case, a trader has by the exercise of his skill and labour compiled information which he distributes to his clients upon a confidential basis (i.e. upon the basis that the information should not be disclosed to others), a rival trader who is not a client but in some manner obtains this information and, well knowing its nature and the basis upon which it was distributed, uses it in his competing business and thereby injures the first mentioned trader in his business, commits a wrongful act vis-à-vis the latter and will be liable to him in damages. In an appropriate case the plaintiff trader would also be entitled to claim an interdict against the continuation of such wrongful conduct. Although there is no precise precedent in our law for this proposition, I am of the opinion that it is a well-founded development of our law relating to unlawful competition in trade and is in accordance with trends of legal development elsewhere. Quite apart from questions of copyright, the fact that the information is distributed upon a confidential basis to a limited class of persons prevents it, in my view, from becoming public property capable of being used or imitated by rival traders. In such circumstances the conduct of a rival trader who obtains and, well knowing the position, uses the information to advance his own business interests and activities amounts to a deliberate misappropriation and filching of the products of another's skill and labour. Such conduct must, in my view, be regarded as dishonest and as constituting a fraud upon the compiler of the information. I consider that, as in the case of false misrepresentations concerning one's own wares or of passing-off, our Courts should treat this as constituting unlawful competition and as being actionable at the suit of the trader damnified thereby. As in those cases, the conduct of the trader misappropriating the information would amount to an infringement of the rights of the compiler thereof to carry on his trade and attract custom without unlawful interference from competitors; and the damage suffered would normally consist of the loss of customers or potential customers who have been induced by such conduct to deal with his competitor rather than with the compiler himself. Bearing in mind the Aquilian character of a claim based upon such conduct, it seems to me that the suffering of damage in this form and its causal connection with the acts of unlawful competition are essential ingredients of the claimant's cause of action.”

 

[53] In the later decision of Stellenbosch Wine Trust Ltd v Oude Meester Group Ltd; Ouder Meester Group Ltd V Stellenbosch Wine Trust Ltd 1972 (3) SA 152 (C) at 162A-162C it was stated that:

I have no doubt that the trader who filches information from a competitor, information which he knows to be secret and confidential, and which has been developed by the competitor's skill and industry, is acting unfairly and dishonestly if he uses the information for his own profit and to the detriment of his rival. His conduct amounts to deliberate misappropriating of a business asset which was acquired by another's skill and industry. It is difficult to appreciate how this conduct differs in principle from the conduct of a man who steals goods from the shelves of a rival's shop. Both types of conduct constitute unlawful interference with the trade of another; both types of conduct are in my view actionable, and fall within the principles of the Lex Aquilia.”


 

[54] The information sought to be protected must, however, constitute a trade secret or confidential information. Neethling, Van Heerden-Neethling Unlawful Competition 2nd ed, p 213 defines a “trade secret” as trade, business or industrial information belonging to a person which has a particular economic value and which is not generally available to and, therefore, known by others.

[55] The information must objectively speaking have an economic value. Neetling et al explain at p 218 that the proprietor of a trade secret acquires and immaterial property right to it and has exclusive powers of use, enjoyment and disposal of the secret. Any unauthorised appropriation by another of the trade secret, use, revelation or publication of confidential information, is prima facie unreasonable or contra bonus mores, an infringement of the right to the trade secret and is unlawful.

[56] Referring to Neetling et al the court in Townsent Productions (Pty) Ltd v Leech 2001 (4) SA 33 (c) at 55A-C stressed that in determining whether or not a trade secret is worthy of protection involves the weighing up of the conflicting interests of the employer and the former employee, having regard to the standard of reasonableness:

On the approach suggested by the learned authors it must first be determined, with reference to the requirements of confidentiality and economic value, whether the information concerned actually constitutes a trade secret. If the information does not constitute a trade secret, cadit quaestio: the employee is entitled to use it. If the information is found to be a trade secret, the Court must pass a value judgment as to whether the use of the information by the ex-employee is justified despite its confidential nature. Such judgment involves a weighing up of the conflicting interests of the employer and ex-employee employing the criterion of reasonableness or the boni mores in the light of all the relevant circumstances of the case.”


 

[57] In Dun and Bradstreet (Pty) Ltd v SA Merchants Combined Credit Bureau (Cape) (Pty) Ltd 1968 (1) SA 209 (C) Corbett J held at 218H-219A that in determining whether competition is unlawful one must have regard to criteria such as fairness and honesty:

'Fairness and honesty are themselves somewhat vague and elastic terms but, while they may not provide a scientific or indeed infallible guide in all cases to the limits of lawful competition, they are relevant criteria which have been used in the past and which, in my view, may be used in the future in the development of the law relating to competition in trade.'

 

[58] The criteria have been elaborated upon, and in a number of decisions, following Atlas Organic Fertilizers (Pty) Ltd v Pikkewyn Ghwano (Pty) Ltd and Others 1981 (2) SA 173 (T), reference has been made to boni mores and the general sense of justice of the community. In Atlas case Van Dijkhorst dealt with the concept of the boni mores of the community in this context and stated (at 188 - 9):

'I have come to the conclusion that the norm to be applied is the objective one of public policy. This is the general sense of justice of the community, the boni mores, manifested in public opinion.

In determining and applying this norm in a particular case, the interests of the competing parties have to be weighed, bearing in mind also the interests of society, the public weal. As this norm cannot exist in vacuo, the morals of the market place, the business ethics of that section of the community where the norm is to be applied, are of major importance in its determination.'

 

[59] There must thus be a balancing of the right to protect trade secrets and confidential information against the right to be economically active and earn a living from the skills and expertise one may have learnt in the employ of a former employer. As a general principle, every person is entitled freely to exercise his or her trade, profession or calling in competition with others. In the old case of G A Fichardt Ltd v The Friend Newspapers Ltd 1916 AD 1 Innes CJ said (at 6):

'Freedom duly and lawfully to exercise one's own energies and to engage in one's own activities, is an absolute right. Every person, therefore, and every company is entitled as against all the world to carry on a lawful business in a way which does not trespass upon the right of others.'

 

[60] In Matthews and Others v Young 1922 AD 492 De Villiers JA (at 507) stated:

'In the absence of special legal restrictions a person is without doubt entitled to the free exercise of his trade, profession or calling, unless he has bound himself to the contrary. But he cannot claim an absolute right to do so without interference from another. Competition often brings about interference in one way or another about which rivals cannot legitimately complain.'

 

[61] This, however, is not an absolute or unfettered right. Competition must remain within lawful bounds, otherwise an Aquilian action will lie against the infringer. In Schultz v Butt 1986 (3) SA 667 (A) Nicholas JA explained that 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 for damages.

[62] These principles apply equally as to what should and should not be regarded as unlawful competition in our post Constitution era. The restriction on the right to trade should not go further than what is reasonably necessary to protect the business interest and should not fringe upon the right to trade enshrined in section 22 of the Constitution.

[63] In Reddy v Siemens Telecommunications (Pty) Ltd 2007 (2) SA 486 (SCA), the respondent had applied in a High Court for an order interdicting and restraining the appellant from taking up employment with one of its competitors, citing an agreement of restraint of trade under which the appellant had undertaken not to take up employment with any of the respondent's competitors in the province of Gauteng for a period of 12 months after termination of his employment, and not to disclose any of the respondent's confidential information. The appellant argued that the terms of the restraint were in conflict with the right freely to engage in the trade, occupation or profession of one's choice as intended in s 22 of the Constitution. He argued that restraints limited that right and that the party seeking to enforce the restraint had to bear the onus of showing that it was reasonable and justifiable as intended in s 36(1) of the Constitution. The Court granted the interdict, holding that it was sufficient that there was a risk that the appellant might use the respondent's trade secrets and confidential information in his new employment if he so chose, and that it was not necessary for the Court to find that he would do so. It was held that the law was that agreements in restraint of trade were valid and enforceable unless the party seeking to escape their workings showed that they were unreasonable and thus contrary to public policy. ( at paragraph [10] at 493G - 494A.)

[64] It was held further that the assessment of the reasonableness of the restraint required a value judgment, and the incidence of the onus played no role in that assessment. Moreover, that value judgment comprehended the considerations referred to in s 36(1) of the Constitution since it necessarily required determining whether the restraint was 'reasonable and justifiable in an open and democratic society based on human dignity, equality and freedom'. The court explained:

“[15] A court must make a value judgment with two principal policy considerations in mind in determining the reasonableness of a restraint. The first is that the public interest requires that parties should comply with their contractual obligations, a notion expressed by the maxim pacta servanda sunt. The second is that all persons should in the interests of society be productive and be permitted to engage in trade and commerce or the professions. Both considerations reflect not only common-law but also constitutional values. Contractual autonomy is part of freedom informing the constitutional value of dignity, and it is by entering into contracts that an individual takes part in economic life. In this sense, freedom to contract is an integral part of the fundamental right referred to in s 22. Section 22 of the Constitution guarantees '[e]very citizen . . . the right to choose their trade, occupation or profession freely' reflecting the closeness of the relationship between the freedom to choose a vocation and the nature of a society based on human dignity as contemplated by the Constitution. It is also an incident of the right to property to the extent that s 25 protects the acquisition, use, enjoyment and exploitation of property, and of the fundamental rights in respect of freedom of association (s 18), labour relations (s 23) and cultural, religious and linguistic communities (s 31).

[16] In applying these two principal considerations, the particular interests must be examined. A restraint would be unenforceable if it prevents a party after termination of his or her employment from partaking in trade or commerce without a corresponding interest of the other party deserving of protection. Such a restraint is not in the public interest. Moreover, a restraint which is reasonable as between the parties may for some other reason be contrary to the public interest. In Basson v Chilwan and Others, Nienaber JA identified four questions that should be asked when considering the reasonableness of a restraint: (a) Does the one party have an interest that deserves protection after termination of the agreement? (b) If so, is that interest threatened by the other party? (c) In that case, does such interest weigh qualitatively and quantitatively against the interest of the other party not to be economically inactive and unproductive? (d) Is there an aspect of public policy having nothing to do with the relationship between the parties that requires that the restraint be maintained or rejected? Where the interest of the party sought to be restrained weighs more than the interest to be protected, the restraint is unreasonable and consequently unenforceable. The enquiry which is undertaken at the time of enforcement covers a wide field and includes the nature, extent and duration of the restraint and factors peculiar to the parties and their respective bargaining powers and interests.

[17] The common-law approach in balancing or reconciling the concurring interests in this manner gives effect to the precepts of s 36(1) of the Constitution:

'The rights in the Bill of Rights may be limited only in terms of law of general application to the extent that the limitation is reasonable and justifiable in an open and democratic society based on human dignity, equality and freedom, taking into account all relevant factors, including -

(a) the nature of the right;

(b) the importance of the purpose of the limitation;

(c) the nature and extent of the limitation;

(d) the relationship between the limitation and its purpose; and

(e) less restrictive means to achieve the purpose.'

An agreement in restraint of trade is concluded pursuant to 'law of general application' referred to in s 36(1). What is meant by this expression includes the law in the general sense of the legal system applicable to all which, in this case, consists of the corpus of law generally known as 'the law of contract' and which allows for contractual freedom and the conclusion of agreements pursuant thereto. The four questions identified in Basson comprehend the considerations referred to in s 36(1). A fifth question, implied by question (c), which may be expressly added, viz whether the restraint goes further than necessary to protect the interest, corresponds with s 36(1)(e) requiring a consideration of less restrictive measures to achieve the purpose of the limitation. The value judgment required by Basson necessarily requires determining whether the restraint or limitation is 'reasonable and justifiable in an open and democratic society based on human dignity, equality and freedom'. I agree with Rautenbach and Reinecke, albeit writing on s 33(1) of the interim Constitution, who remarked that

'dit moeilik [is] om in te sien hoe daar bloot deur die feite deur 'n konstitusionele bril te beoordeel, verbeter kan word aan die wyse waarop die howe ingevolge die gemenereg die private en openbare belange teenoor mekaar opweeg [ten opsigte van ooreenkomste ter beperking van handelsvryheid] . . .'.


 

[65] The court opined that since the appellant had taken up employment with a rival company in a position similar to the one he had occupied with the respondent, the disclosure of confidential information presented an obvious risk to the respondent. It was sufficient for purposes of granting the interdict sought that the appellant could disclose that information if he so chose, which was the very risk against which the respondent had sought to protect itself by means of the restraint clauses. In these circumstances, the court found that the enforcement of the restraint was neither unreasonable nor contrary to public policy:

“[20] … Reddy is in possession of confidential information in respect of which the risk of disclosure by his employment with a competitor, assessed objectively, is obvious. It is not that the mere possession of knowledge is sufficient, and this is not what was suggested by Marais J in BHT Water: Reddy will be employed by Ericsson, a 'concern which carries on the same business as [Siemens]' in a position similar to the one he occupied with Siemens. His loyalty will be to his new employers and the opportunity to disclose confidential information at his disposal, whether deliberately or not, will exist. The restraint was intended to relieve Siemens precisely of this risk of disclosure. In these circumstances the restraint is neither unreasonable nor contrary to public policy. I agree with the remarks of Marais J in BHT Water:

'In my view, all that the applicant can do is to show that there is secret information to which the respondent had access, and which in theory the first respondent could transmit to the second respondent should he desire to do so. The very purpose of the restraint agreement was that the applicant did not wish to have to rely on the bona fides or lack of retained knowledge on the part of the first respondent, of the secret formulae. In my view, it cannot be unreasonable for the applicant in these circumstances to enforce the bargain it has exacted to protect itself. Indeed, the very ratio underlying the bargain was that the applicant should not have to content itself with crossing its fingers and hoping that the first respondent would act honourably or abide by the undertakings he has given. . . . In my view, an ex-employee bound by a restraint, the purpose of which is to protect the existing confidential information of his former employer, cannot defeat an application to enforce such a restraint by giving an undertaking that he will not divulge the information if he is allowed, contrary to the restraint, to enter the employment of a competitor of the applicant. Nor, in my view, can the ex-employee defeat the restraint by saying that he does not remember the confidential information to which it is common cause that he has had access. This would be the more so where the ex-employee, as is the case here, has already breached the terms of the restraint by entering the services of a competitor.'”


 

[66] The requirements for an interdict to restrain the unlawful use of trade secrets and confidential information and to ground a claim for damages have been set out by Harms in his work Amler’s Precedents of Pleadings, 9ed (2018) at p 93 being as follows:

a. The applicant/plaintiff must have a proprietary, quasi-proprietary or other legal interest in the confidential information;

b. The information must have had the necessary quality of confidentiality.

c. A relationship, usually contractual, between the parties, which imposes a duty (expressly, impliedly or tacitly) on the defendant to preserve the confidence of the information. An example of such a contractual relationship is that between an employer and employee or between partners and business associates.

d. The respondent/ defendant must have had knowledge of the confidentiality of the information and its value.

e. Improper possession or use of the information, whether as a springboard or otherwise by the respondent/ defendant.

f. Damages suffered by the applicant/ plaintiff as a result of the unlawful use of its confidential information.

[67] In Van Catricum v Theunissen 1993 (2) SA 726 (T) AT 730D-G the court relied upon the requirements set out by Harms which were summarised succinctly thus:

(1) That the plaintiff has an interest in the confidential information;

(2) The information must be of a confidential nature;

(3) The relationship must exist between the parties which imposes the duty on the respondent to preserve the confidence of information imparted to him, for example the relationship of employer and employee, or the fact that the respondent is a trade rival who has obtained confidential information in an improper manner;

(4) Respondent must have knowledge of the confidentiality of the information and of its value. The knowledge can be express or implied;

(5) Improper use must have been made of that information, whether as a springboard, or otherwise.”


 

[68] In Waste Products Utilisation (Pty) Ltd v Wilkes and another 2003 (2) SA 515 (W) Lewis J (as she then was) explained the concept of “springboarding”:

It is useful, nonetheless, to consider also the concept of springboarding, since the same conduct may constitute both unlawful use of confidential information and the use of that information to gain a springboard in order to compete. 'Springboarding' entails not starting at the beginning in developing a technique, process, piece of equipment or product, but using as the starting point the fruits of someone else's labour. Although the springboard concept applies in regard to confidential information, the misuse of the fruits of someone else's labour may be regarded in a suitable case as unlawful even where the information copied is not confidential. This was the case in Schultz v Butt 1986 (3) SA 667 (A), where the boat hull designed by the plaintiff and copied by the defendant was found not to be confidential, because it was in the public domain. But the copying of it, as a springboard, was regarded as unlawful.”

 

[69] It is also unlawful to filch the clients of one’s former employer as their client base and lists are part of the proprietary information of a company. In Arteflex (Pty) Ltd v Pieters and Another [2023] ZAGPPHC 224 (11 April 2023) the court dealt with a non-solicitation clause and stressed that the relationship between a business and its clients is an asset of the business, although it may be the ex-employee who built up the strong relationship with such clients:

[23] The essence of non-solicitation clauses is aptly explained in an insightful article by Wyborn et al. The discussion equally applies to the South African context, with the proviso that in South Africa, we must incorporate the impact of the Constitution into the discussion. A non-solicitation clause is concerned with protecting a business’ proprietary interests in the event of a former employee setting up or joining a competing business. Non-solicitation clauses recognise that relationships with clients and suppliers often take significant time and investment to build, and as a result, are assets for a business. Employees often develop strong relationships with clients and suppliers during the course of their employment, particularly where they have regular contact.

As with any other restraint in the employment context, the prohibition on solicitation must not go further than whatis reasonably necessary to protect the business interest.”

[70] This was an aspect also dealt with in Van Castricum at 735I-736B:

It is common cause that first respondent was an employee of the applicant and thereafter became an employee of second respondent. It is further common cause that the first respondent removed the list of clients contained in the Bantex handwritten telephone directory from the premises of the applicant's business and used the information contained therein to approach clients of the applicant in her capacity as employee of the second respondent, who is a trade rival of the applicant. It is in my view clearly established in our law that it is unlawful for an employee to take his employer's confidential information or documents and use them to compete with his employer. See Aercrete South Africa (Pty) Ltd and Another v Skema Engineering Co (Pty) Ltd and Others 1984 (4) SA 814 (D) at 822E-G. This applies also to former employees. See Pelunsky & Co v Theron (supra).

The duty to preserve confidential information is not merely limited to the existence of the contractual relationship of employer and employee, but extends to the period after determination of such contractual relationship. See the Harvey Tiling case supra at 321G-322E.

I also hold that the second respondent, being a trade rival of the applicant and having obtained confidential information knowing its true nature and how it was obtained, and having used such information in competition with the applicant, may be restrained from continuing with the unlawful conduct. See Dunn and Bradstreet (Pty) Ltd v SA Merchants Combined Credit Bureau (Cape) (Pty) Ltd 1968 (1) SA 209 (C).

 

The application of the law to the facts of the matter


 

[71] Rossouw’s conduct detailed above incontrovertibly evidences that prior to his departure from Meljo, he intentionally transferred its confidential information to himself which he provided to Mimnesko. Had he done so because of difficulties experienced with Meljo’s computers, there would have been no need to transfer the information to Mimnesko and Rossouw fails to explain his having done so.

[72] It is also apparent that since leaving Meljo, Rossouw has been soliciting Meljo’s clients with a view to supplying the self-same products supplied by Meljo to them under a different name. In so doing, he has springboarded on his knowledge of Meljo’s client base and what each client’s demands are, which he has sought to meet by supplying such clients with products utilising the self-same recipes, albeit marginally adapted, which are used by Meljo to supply these clients. Rossouw has also provided Meljo’s confidential recipes to its competitors to enable them to produce the same or substantially the same products as Meljo. In so acting, Rossouw has unlawfully competed with the Meljo.

[73] Rossouw has failed to provide a reasonable or credible explanation for his actions. The fact that he has done so in order to, as he puts it, “put bread on the table” does not justify his actions or entitled him to utilise Meljo’s confidential information. It is also not a requirement for the Acquilian action of unlawful competition that Meljo establish a intellectual property right in and to the information sought to be protected. In any event, the confidentiality of knowledge that Rossouw acquired during the course of his association with the various Meljo entities was protected by the confidentiality clause in their contracts with Rossouw and/or Mimnesko.

[74] Furthermore, any blending developed by Rossouw during the period he consulted for Meljo, if any, or its predecessors became the economic asset of that Meljo entity and not Rossouw. Although no evidence was placed before this court to establish that the business conducted by Meljo Enterprises CC was transferred to Meljo Enterprises (Pty)Ltd and after its liquidation, to Meljo, factually this appears to have been the position. This is sufficient to establish a “proprietary, quasi proprietary or other legal interest” in the recipes utilised by Meljo and its client lists and information to ground an action for unlawful competition against Rossouw and Mimnesko.

[75] Proprietorship is not a requirement as the action for unlawful competition is not premised upon infringement. Instead, the law of unlawful competition falls under the rubric of the Aquilian action in the law of delict (Atlas Organic Fertilizersm(Pty) Ltd v Pikkewyn Ghwano (Pty) Ltd & others 1981 (2) SA 173 T)

[76] In Prok Africa (Pty) Ltd and Another v. NTH (Pty) Ltd and Others 1980 (3) (SA) 687 it was held at p696 that:

“ Thus the question which falls to be decided is whether in our law it is only at the instance of the owner of confidential information that an action will lie against a third party who unlawfully filches that information. The only reported South African cases deal with claims at the instance of the owner of the confidential information: Dun and Bradstreet (Pty) Ltd v SA Merchants Combined Credit Bureau (Cape) (Pty) Ltd (supra); Harvey Tiling Co (Pty) Ltd v Rodomac (Pty) Ltd and Another (supra); and Stellenbosch Wine Trust Ltd and Another v Oude Meester Group Ltd; Oude Meester Group Ltd v Stellenbosch Wine Trust Ltd and Another 1972 (3) SA 152 (C).

In principle I can see no reason for limiting the scope of this type of action by conferring it only upon the owner of confidential information. The wrong upon which the cause of action is founded and for which the remedy lies is not an invasion of rights of property: the Dun and Bradstreet (Pty) Ltd case supra at 215F - 216A. The wrong is the unlawful infringement of a competitor's right to be protected from unlawful competition: Geary & Son (Pty) Ltd v Gove 1964 (1) SA 434 (A) at 440 - 1. As CORBETT J remarked in the Dun and Bradstreet case (at 218H - 219A):

"Fairness and honesty are themselves somewhat vague and elastic terms but, while they may not provide a scientific or indeed infallible guide in all cases to the limits of lawful competition, they are relevant criteria which have been used in the past and which, in my view, may be used in the future in the development of the law relating to competition in trade."

If A is in lawful possession of the confidential information of B and such possession was obtained by A to further his own business interests, it would be a wrong committed against A for C, a trade rival of A, to obtain that information by dishonest means from A for the purpose of using it to the detriment of the business of A. That it might also be a wrong committed against B is another matter. Once there is dishonest conduct of the type just posited and loss or damage suffered thereby to the person against whom the wrong has been committed, it seems to me that the requisites for Aquilian liability are present.

As appears from the Dunn and Bradstreet case supra at 219 - 220, unfair competition has figured prominently as a basis for tortious liability in the United States of America. At 220H CORBETT J remarked that in the United States parties seeking relief against the piracy of news, radio broadcasts and similar literary property -

"... have had to contend with the competing principle that, in the absence of patent, copyright or deception as to identity or source, the law countenances the imitation of ideas, designs and schemes. Even here, however, relief is granted, under certain circumstances, where trade secrets have been misappropriated and used by a rival trader (see Restatement of Law of Torts ss 757 - 9)."

If one has reference to the Restatement one finds in ss 757 and 758 a treatment of the liability for the disclosure or use of another's trade secret. That would appear to be the type of case considered in the Dunn and Bradstreet, Harvey Tiling and Stellenbosch Wine Trust cases supra, ie a filching of a trade secret from the owner thereof. However, in s 759 the rule stated is that:

"One who, for the purposes of advancing a rival business interest, procures by improper means information about another's business is liable to the other for the harm caused by his possession, disclosure or use of the information."

As to the kind of information it is noted that:

"The rule stated in this section applies to information about one's business whether or not it constitutes a trade secret. The section states the rule of liability applicable only when the information is procured by improper means. Sections 757 and 758 deal specifically with the liability for the disclosure and use of trade secrets, whether they are discovered by improper means or otherwise."

This treatment seems to me to afford strong support for the approach which I have suggested above. Where the information has been obtained by C by honest means or by means having nothing to do with A (who is not the owner of the information or trade secret) it is only the owner B who can sue for common law infringement: Clifford Harris (Pty) Ltd v SGB Building Equipment (Pty) Ltd (supra). However, where such information has been improperly obtained by C from A in circumstances where its use by C will cause damage to A then the latter has a right in his own name to protect his own interests.

This conclusion is no doubt a further extension of the Aquilian relief for "unfair competition". However, such extension seems to me to be implicit in the judgments to which I have already referred. In this regard I may be forgiven a further quotation, again from the judgment of DIEMONT J in the Stellenbosch Wine Trust case (1972 (3) SA 152 (C) at 161G - 162B):

"It must be conceded that these phrases, fairness in competition and H honesty in trade, have an old-fashioned ring about them which may cause the cynic in business to smile, but it is right that the Courts should have regard to and emphasise these virtues. Moreover the phrases are somewhat elastic, as difficult to apply in some cases as the concept of the reasonable man is difficult to apply. Nevertheless, if our law is to develop and is to offer the commercial man protection from unlawful interference in his business, the Courts will not disregard the words fairness and honesty.

A trader who makes fraudulent misrepresentations about his own business to the detriment of his rivals' business is guilty of unlawful interference. So also a trader who passes off his goods as being those of a competititor, or makes injurious false statements concerning his competitors' business. In each case the

interference in unlawful and actionable; and in each case the conduct is unfair or dishonest. I have no doubt that the trader who filches information from a competitor, information which he knows to be secret and confidential, and which has been developed by the competitor's skill and industry, is acting unfairly and dishonestly if he uses the information for his own profit and to the detriment of his rival. His conduct amounts to deliberate misappropriating of a business asset which was acquired by another's skill and industry. It is difficult to appreciate how this conduct differs in principle from the conduct of a man who steals goods from the shelves of a rival's shop. Both types of conduct constitute unlawful interference with the trade of another; both types of conduct are in my view actionable, and fall within the principles of the lex Aquilia."

In the present case the business asset was not acquired by the skill and industry of the second applicant. However, it was acquired at the expense of the second applicant which has acquired the information from Abbey in terms of the licence agreement. It has thus become a business asset of the second applicant no less than if the second applicant had acquired it by its own skill and industry. It is that business asset which the respondents are alleged (and which for present purposes must be assumed) to have acquired by dishonest means and to have used to the detriment of the business of the first applicant.

I am accordingly of the opinion that the applicants do have locus standi to claim the relief sought by them and the respondents' point in limine must be dismissed with costs.”


 

The relief sought

[77] Meljo seeks a final interdict against Rossouw and Mimnesko. It was argued that this does not preclude Rossouw from making a living, but merely from utilising its confidential information to unfairly compete with it and from soliciting Meljo’s customers and competitors in order to supply the same or substantially the same products as are supplied by Meljo to its customers.

[78] In Harvey Tiling Co (Pty) Ltd v Rodomac (Pty) Ltd and Another 1977 (1) (SA) 316 T the court granted an interdict against a former employee who had made use of its former employer’s confidential information relating to the manufacture of roof tiles, which information had been obtained in the course of the defendant’s previous employment which he made available to a competitor, enabling it to manufacture similar roof tiles. The court found that the defendant copied the know-how of the plaintiff, which saved the defendant a great deal of labour a capital investment which provided a springboard to it to compete in the same market.

[79] Usually applications for an interdict are not final and are combined with a claim for damages to be determined in action proceedings after hearing oral evidence.

[80] In the well-known case of Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A) at 634E – 635D the court emphasised that a dispute of fact in motion proceedings requiring oral evidence must be genuine and bona fide:

“In such a case the general rule was stated by VAN WYK J (with whom DE VILLIERS JP and ROSENOW J concurred) in Stellenbosch Farmers' Winery Ltd v Stellenvale Winery (Pty) Ltd 1957 (4) SA 234 (C) at 235E - G, to be:

"... where there is a dispute as to the facts a final interdict should only be granted in notice of motion proceedings if the facts as stated by the respondents together with the admitted facts in the applicant's affidavits justify such an order... Where it is clear that facts, though not formally admitted, cannot be denied, they must be regarded as admitted."

It seem to me, however, that this formulation of the general rule, and particularly the second sentence thereof, requires some clarification and, perhaps, qualification. It is correct that, where in proceedings on notice of motion disputes of fact have arisen on the affidavits, a final order, whether it be an interdict or some other form of relief, may be granted if those facts averred in the applicant's affidavits which have been admitted by the respondent, together with the facts alleged by the respondent, justify such an order. The power of the Court to give such final relief on the papers before it is, however, not confined to such a situation. In certain instances the denial by respondent of a fact alleged by the applicant may not be such as to raise a real, genuine or bona fide dispute of fact …If in such a case the respondent has not availed himself of his right to apply for the deponents concerned to be called for cross-examination under Rule 6 (5) (g) of the Uniform Rules of Court …and the Court is satisfied as to the inherent credibility of the applicant's factual averment, it may proceed on the basis of the correctness thereof and include this fact among those upon which it determines whether the applicant is entitled to the final relief which he seeks … Moreover, there may be exceptions to this general rule, as, for example, where the allegations or denials of the respondent are so far-fetched or clearly untenable that the Court is justified in rejecting them merely on the papers ...”


 

[81] Applying the principles set out in Plascon Evans and considering the admissions made by Rossouw in his answering affidavit, I am satisfied that a final interdict may be granted without the reference to oral evidence. In any event, the explanations provided by Rossouw have, in the main, not created a genuine dispute of fact and/or are so far-fetched and contradictory to be clearly untenable.

[82] I am thus not satisfied that a final interdict should be granted.

[83] However, I am mindful that the interdict sought will place restrictions on Rossouw’s ability to trade in the industry within which he has worked for several years, and that this will infringe his constitutional rights. This limitation needs to be reasonable and be fair to Rossouw; a blanket prohibition with no time limit would not be fair or reasonable. In the circumstances, I propose to limit the effect of the Order to a period of 18 months.

[84] Meljo brought an application to strike out certain passages in Rossouw’s answering affidavit which were hearsay as there was no confirmatory affidavit to support the allegations made. Hearsay is permitted in urgent applications and had the confirmatory affidavits required been provided, this would not have had an material bearing on the outcome of this matter. I thus dismiss the application to strike out.

Costs

[85] Although Rossouw did tender not to approach Meljo’s customers with a view to supplying them with products which Meljo supplies to them, this was only after the application had been brought and it was necessary for Meljo to seek a court order to ensure compliance herewith. I am thus satisfied that Rossouw and Mimnesko should pay the costs of the application on the party and party scale B.

[86] I also accept that the Anton Pillar application was justified and that Rossouw and Mimnesko should pay the costs of that application, particularly as the final order was granted by consent.

[87] I am mindful that attorney and client costs were sought and that Rossouw intentionally and deliberately set out to flitch Meljo’s confidential information prior to the termination of his Consultancy Contract to enable him to appropriate much of Meljo’s business for himself. However, the parties are family and Rossouw’s wife and Haasbroek are sisters. An attorney and client order will only serve to exacerbate the tension between the parties further fracture their familial relationship.

Order

[88] I thus make an order in the following terms:

a. The first and second respondents are interdicted and restrained from disclosing any confidential information relating to the applicant to any third party and/or from making use of such information, for their own benefit, or for the benefit of a third party, specifically:

i. the applicant's customer lists;

ii. the applicant's customer requirements and specific feedback;

iii. the specific products that the applicant supplies to its customers;

iv. the recipes of the applicant's products;

v. the costing and pricing structures of the applicant; and

vi. samples and projects of the applicant.

b. the first and second respondents are interdicted from disclosing and/or using any of the information contained in the e-mails described in the founding affidavit;

c. the first and second respondents are interdicted from approaching, contacting or soliciting the clients of the applicant as set out in annexure "DO1" to the notice of motion for a period of 18 months;

d. The first and second respondents are ordered to delete and permanently remove any confidential information relating to the applicant from any device or online storage platform on which the said respondents transferred, received or stored the confidential information and:

i. to grant the applicant's attorneys access to the devices or online storage platforms referred to above, inclusive of any passwords that may be necessary for the accessing of said devices and online platforms, for the purposes of searching such devices or online storage to confirm that all the applicant's confidential information has been deleted and permanently removed; and

ii. Access to the devices or online storage platforms is to be given to the applicant's attorneys at a mutually agreeable date and time which date and time shall not be later than 2 days of the granting of this order;

iii. The first and second respondents or their duly authorised representatives may be present with the applicant*s attorneys when access to the devices is being granted as aforesaid.

e. the first and second respondents are ordered to pay the costs of this application and the costs reserved in the Anton Pillar application on the party and party scale B.

___________________________

WENTZEL AJ

ACTING JUDGE OF THE HIGH COURT

PRETORIA

For the applicant : J Delport instructed by Barnard Inc

For the respondent: D. De Kock instructed by Hendrik Haasbroek Attorneys


 

 


 

 

 

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