The first respondent, Jonker, and the first appellant, Van der Watt, were business associates involved in several petroleum-related businesses in the Free State (the Agri group) and in Randfontein. In 2007 they agreed to separate their business interests. A written separation agreement provided that Jonker would become sole shareholder of the Agri group companies and the Van der Watts would become sole shareholders of the Randfontein businesses. As part of the settlement, Jonker paid the Van der Watts R2 million in cash. The agreement included reciprocal restraints of trade for a period of 10 years, prohibiting the Van der Watts from engaging in petroleum-related businesses in the Agri group’s service areas. Despite this, the Van der Watts traded in those areas under the name Dynamic Fuels and solicited customers of the Agri group. Jonker and the Agri group companies sought enforcement of the restraint in the Free State High Court, which granted an interdict. The Van der Watts appealed to the Supreme Court of Appeal.
The appeal was dismissed with costs, and the restraint of trade order granted by the Free State High Court was upheld.
The case is significant for clarifying that the sale of a business as a going concern includes its goodwill and that a seller who has alienated goodwill may not solicit former customers, even beyond the express terms of a restraint. It affirms the standing of contracting parties to enforce restraints where they have a protectable interest and reinforces the application of Becker principles in South African law. The judgment also illustrates the enforceability of long-term, reciprocal restraints agreed in a commercial separation context.