Micro-D Limited v Moyo and Others

The applicant, Micro-D Limited, is a private company with its principal place of business in the United Kingdom and a satellite sales office in Kyalami, Midrand. The first to third respondents were formerly employed by the applicant as account managers and, in that role, dealt directly with the applicant’s customers, marketing products, processing requests for quotations, and converting quotations into purchase orders. They had access to the applicant’s customer lists, pricing, profit mark-ups and related documentation. Each had concluded written employment agreements containing a 12-month post-termination non-solicitation restraint in clause 15. The applicant did not seek to enforce the broader non-competition restraint in clause 14. The fourth respondent, Bakwena IT Distribution (Pty) Ltd, was incorporated while the first to third respondents were still employed by the applicant, operated from the same business address as the applicant’s satellite office, and had the first to third respondents as directors. In November 2018, the applicant discovered while processing a purchase order that a customer quotation request had allegedly been diverted to the fourth respondent. After investigation, the applicant found that the fourth respondent was doing business with certain of its customers, including Custom IT and Wires & Wireless. The applicant’s attorneys demanded undertakings from the respondents on 20 November 2018 that the non-solicitation restraint would be honoured and that the fourth respondent would desist from soliciting the applicant’s customers, but the respondents refused. The applicant then sought urgent final interdictory relief restraining the respondents from breaching the non-solicitation restraints and from unlawfully competing with it.

• Whether the Gauteng Local Division had jurisdiction to determine the application
• Whether the applicant’s alleged non-compliance with sections 14 and 15 of the Immigration Act rendered its business unlawful in South Africa and the employment contracts void or unenforceable
• Whether the hearsay evidence, including emails, WhatsApp messages and client confirmations, should be admitted in the interests of justice under section 3 of the Law of Evidence Amendment Act 45 of 1988
• Whether the respondents had raised a real, genuine and bona fide dispute of fact sufficient to defeat final relief on motion under the Plascon-Evans rule
• Whether clause 15 of the employment contracts created enforceable non-solicitation obligations binding on the first to third respondents
• Whether the fourth respondent, through the conduct and knowledge of its director-respondents, was unlawfully assisting breaches of the restraint and engaging in unlawful competition
• Whether the applicant had established the requirements for a final interdict: a clear right, injury actually committed or reasonably apprehended, and absence of an adequate alternative remedy
• Whether the non-solicitation restraint was unreasonable or contrary to public policy

The application succeeded. The first, second and third respondents were interdicted, for the balance of their respective 12-month restraint periods, from directly or indirectly soliciting or assisting in soliciting in competition with the applicant the custom or business of any customer of the applicant, including those listed in annexure FA30, with whom they had personal contact or dealings on behalf of the applicant during the 12 months before termination of employment. They were also interdicted from doing or saying anything knowingly or recklessly prejudicial to the applicant’s interests or likely to result in the discontinuance of any contract, arrangement or benefit of the applicant. The order operated against the first respondent until 25 September 2019, against the second respondent until 8 October 2019, and against the third respondent until 30 November 2019. The fourth respondent was interdicted until 30 November 2019 from soliciting or assisting in soliciting, in competition with the applicant, the custom or business of any customer of the applicant as identified in the order. The first to fourth respondents were ordered to pay the costs jointly and severally.

A post-employment non-solicitation restraint is enforceable where the employer proves a protectable proprietary interest in its customer connections, that the former employees had personal dealings with those customers and used that relationship to solicit or divert their business, and that the restraint is reasonable in duration and scope. In motion proceedings, bald or uncreditworthy denials that fail to engage with facts peculiarly within a respondent’s knowledge do not create a genuine dispute of fact sufficient to defeat final relief. A competing company that knowingly benefits from and assists former employees to breach enforceable restraint obligations acts wrongfully and may itself be interdicted. A damages claim is not an adequate alternative remedy where ongoing solicitation threatens continued infringement of the employer’s rights.

The court observed that, even apart from the merits of the jurisdictional argument, the place where the employment agreements were concluded is not decisive of jurisdiction. It also commented that the Immigration Act point had not been fully canvassed on the papers and indicated that the Act appears to regulate natural persons rather than corporate entities. In addition, the court emphasised more generally, by reference to authority, that legal advisers bear a serious duty to ensure answering affidavits properly engage with disputed facts rather than relying on bare denials.

The case is significant as a High Court reaffirmation of South African principles governing the enforcement of post-employment restraints, especially non-solicitation clauses directed at protecting customer connections rather than imposing blanket prohibitions on competition. It also illustrates the court’s robust approach to bald denials in motion proceedings, the application of Plascon-Evans and related authorities, and the willingness to admit hearsay evidence in restraint and unlawful competition matters where the interests of justice require it. The judgment further confirms that a company can be interdicted from benefiting from or assisting former employees’ breaches of restraint obligations, grounding liability in unlawful competition and knowing interference with contractual rights.