The appellant, a property development partnership, attempted to purchase a Carmelite convent property in Sandton for development. After the initial purchase fell through, the appellant spent over two years developing a proposal involving consultants (architects, town planners, quantity surveyors, etc.) to create a feasibility study for a piazza-type convenience shopping centre. On 26 July 1994, Mr Page met with the first respondent (Rivera) and presented him with an aerial photograph, conceptual drawings, and a feasibility study, proposing a joint venture where the appellant would receive various fees and profit share. Rivera rejected the proposal on 31 August 1994, stating it was not viable "in its present form." In February 1995, the second respondent purchased the property and developed a different type of shopping mall (closed mall-type) called The Cloisters, securing Pick 'n Pay as an anchor tenant. The appellant claimed damages for unlawful appropriation of confidential information. At the close of the appellant's case, the trial court (Wunsh J) granted absolution from the instance with costs.
The appeal was dismissed with costs, including the costs of two counsel. The order of absolution from the instance granted by the court a quo was upheld.
The binding legal principles established are: (1) At the close of a plaintiff's case, absolution from the instance should be granted if there is no evidence upon which a court, applying its mind reasonably, could or might find for the plaintiff - the plaintiff must establish a prima facie case with evidence relating to all elements of the claim. (2) For information to be legally protected as confidential, it must have the necessary quality of confidentiality and the plaintiff must have at least a quasi-proprietary or legal interest in it; mere usefulness or commercial value is insufficient. (3) A tacit contract regarding confidentiality requires evidence of conduct justifying a reasonable inference that parties intended to contract on those terms and reached consensus ad idem. (4) Information that is public knowledge, readily accessible to others in the industry, transient in nature, or disclosed without restrictions on use generally lacks the quality of confidentiality required for legal protection. (5) To establish appropriation or exploitation of confidential information, there must be evidence that the defendant actually used the specific confidential information, not merely that they developed a similar project or were inspired to pursue an opportunity.
The Court made several non-binding observations: (1) The formulation of the absolution test in terms of what a "reasonable man might find" tends to cloud the issue, as it had its origin in jury trials and the court should be concerned with its own judgment, not that of a hypothetical reasonable person. (2) There is doubt whether much of the information provided (particularly regarding access problems and rezoning investigations) gave the appellant any legal interest worthy of protection. (3) The English equitable remedy for breach of confidence exists independently of contract or delict, and underlying principles may differ from South African law; foreign law in the field of unlawful competition should be approached with circumspection as it may be influenced by legislation and different public policy considerations. (4) Had the claim been one for agent's commission for kindling interest in the property, there may have been some merit to the argument, but that was not the nature of the claim. (5) The Court commented on the problem of excessive records, noting that only 11 of 41 volumes were relevant, though it declined to make a special costs order due to the transition period between old and new court rules; however, the practice of including irrelevant matter in records cannot be condoned.
This case is significant in South African law for: (1) clarifying and reaffirming the Claude Neon test for absolution from the instance, emphasizing that absolution should be granted sparingly but in the interests of justice when the occasion arises; (2) clarifying that the test concerns the court's own judgment, not what a hypothetical "reasonable person" might think; (3) establishing strict requirements for protection of confidential information in the context of property development proposals - mere usefulness or value is insufficient; (4) requiring that information have the necessary quality of confidentiality and that the plaintiff have a quasi-proprietary or legal interest in it; (5) demonstrating the high threshold for establishing tacit contracts regarding confidentiality, requiring clear evidence of animus contrahendi and consensus ad idem; (6) distinguishing between causing interest in a property (which might support an agent's commission claim) and appropriation of confidential information; and (7) noting that English equitable remedies for confidential information may differ from South African remedies based on contract or delict, and foreign law should be approached with circumspection in the field of unlawful competition.