True North Holdings (Pty) Limited and Others v Sky Gecko Software Lab (Pty) Limited and Another

True North Holdings (Pty) Limited, Cash Converters Southern Africa (Pty) Limited, and True North Franchising (Pty) Limited (the applicants) are part of the Cash Converters franchise group, operating in the second-hand goods, pawnbroking, and micro-lending industries. Sky Gecko Software Lab (Pty) Limited and Glynn-Robert Hendricks (the respondents) provided information technology consultancy services to the applicants and were paid over R8 million from April 2019 to September 2023. In mid-October 2023, the applicants discovered that the respondents were working with competing businesses. The contractual relationship ended on 23 October 2023. The applicants alleged that the respondents breached restraint of trade and confidentiality provisions. The applicants launched an urgent/semi-urgent application on 19 December 2023 seeking to enforce the restraint and interdict disclosure of confidential information. A timetable was agreed for filing papers, with the hearing set for 17 May 2024. At 08h36 on the morning of the hearing, the applicants filed an application in terms of Rule 6(5)(g) to refer the issue of whether the applicants enjoy a protectable interest to oral evidence. The referral application was dismissed. The applicants then sought interim relief pending an application for leave to appeal the dismissal of the referral application.

• Whether the application for referral to oral evidence in terms of Rule 6(5)(g) should be granted at the eleventh hour on the day of the hearing.
• Whether a referral to oral evidence would conduce to an effective and speedy resolution of the dispute.
• Whether the applicants were entitled to interim interdictory relief pending an application for leave to appeal the dismissal of the referral application, rather than pending the finalisation of the main application.

The application for referral to oral evidence was dismissed with costs of two counsel. The application for interim relief pending the application for leave to appeal the dismissal of the referral application was also dismissed with costs of two counsel on the C Scale.

In exercising its discretion under Rule 6(5)(g), the overriding consideration is whether a referral to oral evidence will ensure a just and expeditious decision, specifically whether it will conduce to an effective and speedy resolution of the dispute and the overall application. A referral will not be granted where it would delay rather than expedite resolution, particularly where the applicant claimed urgency, failed to raise any dispute of fact at the earliest opportunity, and only applied for referral at the eleventh hour. Additionally, a court may not grant interim relief where the relief is sought pending an application for leave to appeal an interlocutory ruling rather than pending the main proceedings, and the court cannot refashion the relief sought by the parties in an adversarial system.

The court remarked that it was 'by no means convinced that the applicants have not made out a case for the restraint and confidentiality relief in the main application' but expressly stated it could not and did not make any finding on that issue as it was not before the court. The court also commented that the respondents should have had no difficulty with being restrained from disclosing confidential information as a matter of principle.

This case provides important guidance on the application of Rule 6(5)(g) in motion proceedings, emphasising that the overriding consideration is a just and expeditious decision. It clarifies that a referral to oral evidence will not be granted where it would delay rather than speed up resolution, especially when a dispute of fact was not raised at the earliest opportunity. The judgment also reinforces the principle from Fischer v Ramahlele that courts must determine only the issues identified by the parties and cannot refashion the relief sought. It serves as a cautionary tale on how not to litigate urgent applications and highlights the importance of procedural diligence.