---

IN THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

JUDGMENT

CASE NO: J 289/16

In the matter between:

SELECT-A-BOX CC                                                                                               APPLICANT

and

MARIUS KOEKEMOER                                                                          FIRST RESPONDENT

BINDERBOX (PTY) LTD                                                                    SECOND RESPONDENT

Date of ruling: 13 October 2016

JUDGMENT

VAN NIEKERK J

[1] On 3 March 2016, I granted the following order, by agreement:

1.    The 1^st and 2^nd Respondent (as substituted) are hereby jointly and severally interdicted and restrained for a period of twelve months from 4 January 2016 (“the restraint period”), within a 100km radius of 8 Bunsen Street, Industria West, JOHANNESBURG (“the restraint area”) from acting in breach of the agreement of restraint concluded between the Applicant and the 1^st Respondent.

2.    The 1^st Respondent is entitled to be employed in the 2^nd Respondent’s LITHO Division and to sell LITHO product to any person, however he may not in any way, whether directly or indirectly, take part in the business of the 2^nd Respondent’s corrugated box division (or any other division that would breach the restraint aforesaid) for the restraint period within the restraint area.

3.    Insofar as the LITHO customers may of their own accord approach the 1^st Respondent concerning the 2^nd Respondent’s corrugated box business, the 1^st Respondent is entitled to do no more than to refer them to the relevant division of the 2^nd Respondent.

4.    The 1^st Respondent is ordered:

4.1.        Not to, whether directly or indirectly, use the Applicant’s proprietary and / or confidential information obtained during his employment with the Applicant in the restraint area or during the restraint period;

4.2.        Not to, whether directly or indirectly, use his knowledge of and influence over the Applicant’s customers, employees and business in the restraint area during the restraint period for his own interests or the interests of the 2^nd Respondent, save that the Applicant may use his knowledge for the advancement of the 2^nd Respondent’s LITHO range only;

5.    The costs of this application, including the costs of all interlocutory applications associated with this matter, are reserved and the parties are directed to deliver Heads of Argument dealing with the question of costs only as follows:

5.1.      The Applicant, by no later than 29 March 2016;

5.2.      The Respondent, by no later than 8 April 2016;

6.    The parties have agreed that this Court can deliver judgment on the issue of costs without hearing oral argument and based solely on the Heads of Argument so submitted.

[2] It is apparent from the terms of the order that there are two separate costs orders to consider. The first is in respect of the main application; the second in relation to an interlocutory application concerning the citation of the second respondent.

[3] The principles that regulate the awarding of costs in this court flow from s 162 of the Labour Relations Act (LRA). This court has recently held that in matters where the court exercises concurrent jurisdiction with the civil courts under s 77(3) of the Basic Conditions of Employment Act (BCEA), the court’s powers in relation to costs remain regulated by the LRA (see Crosnier v Easigas (Pty) Ltd [2016] JOL 35547 (LC)). In other words, although the principle that costs follow the result applied in the civil courts is a relevant factor, the court must nonetheless determine, by exercising a discretion, what the requirements of the law and fairness demand. As this court pointed out some time ago, that there is no closed list of factors to be considered, nor are the requirements of the law elevated over those of fairness. (See Callguard Security Services (Pty) Ltd v TGWU [1997] 4 BLLR 392 (LC).)

[4] The present application was brought against the first respondent Koekemoer and the second respondent, described a ‘Freddy Binder t/a Binder Box’.  In the answering affidavit, the point was taken that the first respondent was employed by Binderbox (Pty) Ltd and not by Freddy Binder. Prior to the filing of the answering affidavit, the second respondent’s attorney had alerted the applicant’s attorney to this error. This notwithstanding, at the time that the answering affidavit was filed, no application to substitute had been filed. A notice to amend the citation of the second respondent was subsequently filed, but on account of the settlement (which incorporated an agreed order to substitute), it was not necessary to hear argument on the matter.

[5] In so far as the costs of the amendment sought are concerned, I must necessarily take into account that prior to the delivery of the answering affidavit, the error in the citation of the second respondent had been drawn to the attention of the applicant but that in the absence of any response to the letter concerned, the respondents were obliged to incur unnecessary costs by addressing the point in the answering affidavit. In the affidavit opposing interlocutory application, it was noted that the point had been raised as a point in limine in the answering affidavit and that had an application to substitute been delivered prior to the delivery of that affidavit, costs would have been saved. To the extent that the applicant contends that Binder does not disclose what costs he had incurred and that he suffered no prejudice which the court may care through an appropriate costs order, the unnecessary incurring of additional costs is clearly a form of prejudice, the nature and extent of which can be addressed by a costs order in an amount to be determined by the taxing master. The fact remains that costs could and should have been tended but were not, resulting in additional litigation, including the interlocutory application. To the extent that the applicant submits that it is competent for this court simply to correct the citation in the absence of any application for leave to amend, in my view, this is incorrect. The case cited by the applicant in support of this proposition (HUV Cape Spice v Hot Spice Sauces CC (22227/10, 10 May 2011, Louw J) deals with the limited situation where an entity was incorrectly cited as a company when it should have been cited as a firm or business. The present instance is not one of a simple misnomer where  the court is entitled to substitute one legal entity for another. In the present matter, there is a separate legal entity involved –‘Freddy Binder’ (a natural person) exists separately from Binderbox (Pty) Ltd, a juristic person. Even if I am wrong in my reading of this judgment, the fact remains that the applicant elected to file a formal application and thus recognised that this was required to cure the defect in its papers. The respondents were obliged to deal with that application, and incurred costs in doing so. In these circumstances, it is not necessary for me to canvass the respondents’ submissions in regard to the interlocutory application itself. I am satisfied for the reasons set out above that the requirements of the law and fairness would be satisfied by an order to the effect that the applicant should pay the costs of the interlocutory application, as well as the additional costs incurred by the respondent in raising the second point in limine in the main application. It is fair when a party goes to some length to avoid costs only to be rebuffed that costs be awarded to the party who seeks to avoid litigation.

[6] In relation to the costs of the main application, a useful departing point is the relative success of the parties. It should be recalled that the applicant sought an interdict preventing the respondents from acting in breach of for discreet restraint of trade agreements, preventing the first respondent from continuing in his employment with the second respondent, preventing the first respondent from using the applicant’s proprietary and confidential information, preventing the first respondent from using his knowledge and influence over the applicants customers, and preventing the first respondent from being interested in or engaged in or concerned with any business similar to a competing in the industry in which the applicant operates.

[7] Prior to the delivery of the answering affidavit, the applicant received a tender from the second respondent (as substituted) that it undertook:

‘…only to employ Mr Koekemoer in the Litho division of Binderbox (Pty) Ltd and not to involve him in any way in its corrugated carton division within a radius of 100 km from the address of Select-a –Box at 9 Bunsen Road, Industria, Johannesburg for a period of 12 months from the 5^th of January 2016.

[8] The tender accords substantially with the order ultimately granted. The applicant thus had a tender for substantially the same relief that was finally agreed upon prior to the delivery of the answering affidavit. The applicant submits, in its attempt to justify the continuance of the matter, that the undertaking did not address the important aspect of the protection of the applicant’s trade secrets and confidential information as well as the first respondent’s influence and knowledge over the applicants customers and their requirements. There are two primary reasons to reject the submission. First, the tender included an undertaking that he first respondent would not be involved in any way in the corrugated carton division. Secondly, the tender was accompanied by the statement: ‘This should put to rest any concerns your client might have’, an invitation to the applicant to raise any further concerns that it might have harboured. In my view, the fact that the respondents have been materially successful in their opposition to the application, that there is no relationship between the parties of any ongoing nature that might be prejudiced by an order for costs, that the applicant elected not to accept the tender made by the respondents ultimately to settle on broadly the same terms that had been offered prior to the delivery of the answering affidavit all suggest that the requirements of the law and fairness would be best satisfied by an order to the effect that the respondents be entitled to their costs.

[9] The second respondent seeks an order for costs on a punitive scale. The second respondent submits that the averments of the respondents, which must necessarily be taken as correct in terms of the Plascon Evans rule, show mala fide conduct on the part of the applicant and that even if one were to ignore that rule, when the two versions are weighed, the applicant has abused the process of court. I am not persuaded that any of the grounds submitted by the respondents justifies an order for costs on a punitive scale. An order of that nature is ordinarily justifiable were an application is frivolous or vexatious. In my view, while some of the criticisms levelled by the respondents against the manner in which these proceedings have been conducted may will be justifiable, the conduct of the applicant has not been such that an order for costs on a punitive scale is warranted.

I make the following order:

1.    The applicant is to pay the costs of the proceedings, including the costs of the interlocutory application.  

ANDRÉ VAN NIEKERK

JUDGE OF THE LABOUR COURT

REPRESENTATION

 

For the applicant: Adv. BL Roode, instructed by Polson and Ross Attorneys

For the respondents: Adv. A Campbell, instructed by Reg Joubert Attorney

---