Pika Chemical & Technical (Pty) Ltd t/a Afritech v Nolte and Others

The applicant, Pika Chemical & Technical (Pty) Ltd t/a Afritech, produces chemical compounds including a fruit drying oil known as 'Pylene FDO'. The first respondent, Mr James Nolte, a chemist and former director of the applicant, developed Pylene FDO by reverse engineering an Australian product. Pylene FDO is highly lucrative, supplied to dried fruit companies. The fifth respondent, Pioneer Foods (Pepsico), informed the applicant it would source FDO from the third respondent, Southern Oil (SOILL), a new market entrant. The applicant discovered that SOILL had engaged Mr Nolte as a consultant, and that the fourth respondent Chemtoll (which also manufactures for the applicant under a non-disclosure agreement) was manufacturing SOILL's FDO. The applicant believes SOILL's FDO uses its confidential Pylene FDO formulation, disclosed by Mr Nolte in breach of fiduciary duty. The applicant sought an interim interdict to restrain respondents from using its formulation.

• Whether the formulation of Pylene FDO is confidential to the applicant and worthy of protection as proprietary information.
• Whether Mr Nolte breached his ongoing fiduciary duty as a former director by disclosing confidential information to SOILL.
• Whether SOILL must knowingly have misappropriated confidential information for interdictory relief to be granted against it.
• Whether the applicant satisfied the requirements for an interim interdict (prima facie right, irreparable harm, balance of convenience, no alternative remedy).
• Whether the applicant's delay in launching proceedings should disentitle it to interim relief.

An interim interdict was granted restraining all five respondents from using or dealing with the applicant's fruit drying formulations without consent, pending final determination of an action to be instituted within 15 court days. The first, second and third respondents were ordered to pay the applicant's costs jointly and severally, including costs of two counsel on scale C.

The court held that a former director's fiduciary duty not to disclose confidential information survives resignation and is breached when the director uses or discloses confidential information belonging to the company that is worthy of protection. The court further held that for an interim interdict protecting confidential information, the applicant need only establish a prima facie right of ownership and confidentiality, and that infringement is occurring — there is no additional requirement to prove that a third party recipient 'knowingly' misappropriated the information, as the element of knowledge relates to the delictual claim for unlawful competition rather than to the requirements for interim interdictory relief.

The court observed that even though the interdict might have a 'final in effect' consequence due to trial delays, this does not alter the legal nature of the interim relief, which endures only until trial finalisation. The court also noted that SOILL's distinction between assisting with 'production process' versus 'formulation' was opaque and might require oral evidence to clarify.

This case reaffirms the ongoing nature of a director's fiduciary duty regarding confidential information post-resignation in South African law. It clarifies that for interim interdictory relief protecting trade secrets and confidential formulations, a prima facie showing of ownership and infringement suffices, without needing to prove knowing misappropriation by third-party recipients — distinguishing the requirements for an interdict from those for a delictual damages claim based on unlawful competition. The case is significant in the context of intellectual property protection for commercially valuable, unpatented formulations in South Africa.