Camelsa Consulting Group (Pty) Ltd v Mhizha (J1901/2016) [2016] ZALCJHB 488 (22 September 2016) per A van Niekerk J.
The LC declined to grant a restraining order, mainly for lack of proof of any protectable interest. The case is unusual because the former employer sought to restrain a former employee from working for a client as opposed to a competitor.
Excerpts without footnotes
‘[8] Secondly, in my view, the applicant’s protectable interest is a narrow one, so narrow that it is not deserving of enforcement. The applicant does not contend that the first respondent is in possession of trade secrets or confidential information that may be compromised should he be employed by the second respondent. In essence, the first respondent contends, in the words of Basson v Chilwan and others 1993 SA 742 (A), that the applicant has no interest that is deserving of protection. The protectable interest on which the applicant relies is described as its ‘income stream in excess of R1 million annually’ and the prospect that the second respondent will no longer use its services to compile annual financial statements.
[9] While a commercial relationship with a client can never be said not to constitute a protectable interest, it is common cause that the service level agreement between the applicant and the first respondent continued until 30 June 2014, and that it currently continues on a month to month basis. The ‘income stream’ on which the applicant relies may therefore be lawfully terminated, in accordance with the terms of the agreement, on a month’s notice. The applicant’s assertion that it has no security in regard to the income stream to which it refers ‘other than the restraint provisions in First Respondent’s contract of employment’, has no merit.
The restraint agreement confers little if any security in circumstances where the service level agreement itself is terminable on a months’ notice. Were the second respondent to terminate the contract, the applicant would have no right to continue to provide services to the first respondent, whether through the auspices of the first respondent or any other employee. The restraint does not provide any right by the applicant to render services to the second respondent or to otherwise maintain the relationship of service provider- client, nor is it a guarantee of the first respondent’s continued loyalty and support. If the second respondent decides that the services currently outsourced to the first respondent are best rendered in-house by one of its own employees, that is the second respondent’s prerogative and provided the service level agreement is lawfully terminated, that is no business of the applicant’.