Not reportable in the matter between

ad hoc basis assisted him with some typing – she assisted him after hours or was supposed to do so after hours. He thought she was assisting him as a friend as opposed to a "work obligation".
It is correct that he approached Mr Chris Cloete to assist him with doing the books of the second respondent. The agreement he had with Mr Cloete was that he will do the books in his own time on the second respondent's laptop. Earlier this year Mr Cloete again became involved in the "financial affairs" of the second respondent. A reconciliation statement had to be drawn relating to the time when he (Mr Cloete) attended to the books of the second respondent. Mr Cloete did the books of the second respondent for a period of four months, which ceased in 0ctober 2006.
It is true that the second respondent makes payment to Cornerstone Equestrian Centre on a monthly basis in respect of the riding lessons which the daughter of the first respondent attends. This was done in order to encourage the first respondent to promote the sale of products the second respondent was distributing in the equine industry. The applicant was not involved in the equine industry.
He accepts that the first respondent has represented to Buffalo Freight Systems (Pty) Ltd that he is a director of the second respondent, although the true position is that he is not a director of the second respondent. First respondent was requested by him to sign a letter on his behalf as he (the deponent) was overseas and it was necessary that the said letter is signed by an official of the company.
It is correct that the second respondent required bags and labels to sell its products in. He asked the first respondent as to which suppliers they are utilising in purchasing bags and having labels printed. He discussed the matter with Ms Wessels and asked her for the contact details of Afripack and Stallion Repro, which companies manufacture bags and labels.
He confirmed that he approached Ms Wessels for a copy of the distribution agreement entered into between applicant and Azanian Chemicals (Pty) Ltd after being advised to do so by Dr Catton of Azanian Chemicals (Pty) Ltd after the latter company agreed to grant second respondent distribution rights of one of their products. He personally negotiated with Dr Catton who is his friend. He also personally contacted Mr Swindon and offered him TMQ.
Applicant does not have an exclusive right to distribute products of Azanian Chemicals (Pty) Ltd nor to the services of Dr Catton.
The amount of R684 000,00 which the second respondent paid to the third respondent was in terms of an invoice received for product development in terms of an agreement concluded between the third respondent and the second respondent. Product developed does not compete with applicant's products.
He further alleges that he concedes that a veterinarian prescription is not necessary for the use of TMQ or TM 200 or Zinc Bacitracin. He never intended to convey that it was a legal requirement. He apologises if he created a wrong impression. The customers that the second respondent is dealing with, is as a result of his long experience in the industry and he approached them with a view to market the products of the second respondent.
The list of entities that the applicant alleges that are its customers, have been known to him for many years and he has had business dealings with most and if not all of them on behalf of his previous companies and now on behalf of the second respondent.
The applicant has not identified the specific customers who it contends are its customers and who the second respondent now deals with. Applicant has made reference to two customers, namely Avi-Pharm and NVS Biocare. In annexure "JB37" attached to the papers, the applicant has simply included all entities that operate in the industry, without producing any evidence that they were procuring either TM 200 or Stafac or both from the applicant.
Mr Gagiano and Hexachem were known to him due to the fact that he was involved in the animal feed additive industry. He met Mr Gagiano only once in Pretoria – he cannot recall whether the first respondent was present at the said meeting. They could have discussed the industry but denies that he told Mr Gagiano that together with the first respondent they have set up the second respondent.
They discussed the possibility that the second respondent would also distribute Zinc Bacitracin in South Africa. A verbal agreement was concluded.
He spoke to Mr Gagiano on several occasions although they met only once. The draft agreement was given to Mr Gagiano by him.
Second respondent is distributing Zinc Bacitracin in terms of the verbal agreement as the written agreement was never signed.
He further alleges that he received a telephone call from Mr Chris Cloete and also a copy of a "press release" released by the applicant dated 5 June 2007.
Mr Cloete advised him that all the staff of the applicant have either resigned or have been retrenched with the exception of Ms Caroline Wessels. This is due to the fact that the applicant will no longer distribute products of its own within the Republic of South Africa. All products previously distributed by the applicant will now be distributed by a company known as Virbac RSA.
He was further advised that Ms Wessels will apparently continue for a short period of time, in the mornings only to take further orders from customers of the applicant which orders will then be serviced by Virbac. The products in question are those products manufactured and supplied by Phibro Animal Health in the United States of America.
All stock of the applicant were sold to Virbac.
A further affidavit by Mr Groenewald was filed by the second respondent. In the said affidavit Mr Groenewald, amongst others, states that it is correct that he was at a meeting where Messrs Gagiano and Hattingh were present. The said meeting took place in Pretoria. At the said meeting Messrs Gagiano and Hattingh discussed the distribution of Zinc Bacitracin by the second respondent. He was not involved in the said discussions.
He further alleges that "JB37" is a list of all known potential customers in the industry, some of the names appearing on the list were customers of the applicant before the applicant ceased business.
8. FINDINGS

It is common cause that when the application was launched the applicant was the holder of the trademarks and the sole distributor in South Africa of products called TM 100 and TM 200 and the second respondent distributes TMQ or TMQ 200 and Zinc Bacitracin. TMQ or TMQ 200 is a direct replacement product of TM 100 and TM 200 as they are based on the same molecule oxytetracyclene.
TMQ, TM 100 and TM 200 have the same application in terms of treating animal diseases and have comparable efficacy.
A customer who has TM 100 or TM 200 does not need TMQ. The products compete with each other in the South African market.
Applicant also distributed a product called Stafac 500 and the second respondent distributes a competing product called Zinc Bacitracin. Their applications overlap.
It is also common cause that the second respondent was utilising the services of some of the employees of the applicant, particularly for certain administrative duties and book-keeping duties.
Mr Gagiano alleges that during April 2005 he had a meeting with Messrs Hattingh and Groenewald at which meeting they had certain discussions. Mr Hattingh confirms that he once had a meeting with Mr Gagiano but he cannot recall whether Mr Groenewald was present at the meeting he had with Mr Gagiano.
0n the other hand, Mr Groenewald alleges that he was present at the meeting between Messrs Gagiano and Hattingh, which meeting was held in Pretoria, although he did not participate in the discussions.
The most probable version is that of Mr Gagiano. If Mr Groenewald did not participate in the discussions, what was the purpose of him being present at the said meeting? There is no explanation of his presence at the said meeting.
Mr Groenewald attended the said meeting in order to assist the second respondent to secure a distribution agreement of Zinc Bacitracin, which is a product which competes with Stafac 500 which is distributed by the applicant. As stated earlier by the parties, the application of the two products overlap.
The applicant alleges that first respondent advised Mr Swindon to purchase TMQ from the second respondent instead of TM 200 which is produced and distributed by the applicant.
In response to the above allegation second respondent denied that first respondent advised Mr Swindon to purchase TMQ and further stated that TMQ can only be prescribed by a veterinarian. In the further affidavit, second respondent turned around and said that in fact, what he wanted to convey is that a prescription by a veterinarian is usually obtained before a customer can utilise the said product. The probabilities are that the version of Mr Swindon is the correct version. He was persuaded by the first respondent to switch from the product of the applicant to the product of the second respondent. This explains why the order was sent to the applicant, where first respondent was employed and from there it was redirected to the second respondent.
The first respondent assisted the second respondent to pursue its business dealings and also encouraged or allowed the staff of the applicant to assist the second respondent to the detriment of the applicant.
The first respondent's behaviour as mentioned above was probably as a result of his belief that at some future date, he will acquire 50% shareholding of the second respondent. Whether he was, in law, capable of acquiring the said shareholding as promised by Mr Hattingh, I believe is not relevant for the purpose of this judgment.
The second respondent alleges that the agreement he had with the staff members of the applicant was that they will assist the second respondent during their spare time and not during office hours. There is evidence by the staff of the applicant, particularly Ms Wessels, to the effect that she from time to time assisted Mr Hattingh with typing and also helped his assistant with imports and exports. She used the resources of the applicant to assist Mr Hattingh.
She further alleges that she once received an order for TMQ from Biocare International addressed to the applicant. 0n instructions of Mr Groenewald, she faxed same to the second respondent. The probabilities are that that was done during working hours.
In my view, it is incorrect for the second respondent to utilise the staff and other resources of the applicant in the manner in which the second respondent did. It cannot be said that the second respondent was making his business dealings in a fair or honest manner.
In Grundlingh and 0thers v Phumelela Gaming and Leisure Ltd 2005 6 SA 502 (SCA) at 517 paragraph 40 FARLAM et CONRADIE JJA said:

"The test for the unlawfulness of a competitive action is essentially public policy and the legal convictions of the community. The latter concept ordinarily includes not only right thinking members of the community who might be expected to hold a view on the particular topic but also … those involved in the industry, the business ethics of that section of the community where the norm is to be applied. Apart from these considerations there are elements like an inherent sense of fair play and honesty … the question whether the parties concerned are competitors; …"
In Atlas 0rganic Fertilizers v Pikkewyn Ghwano 1981 2 SA 173 (TPD) at 202 VAN DIJKHORST J said the following:

"A delictual remedy is available to a party to a contract who complains that a third party has intentionally and without lawful justification induced another party to the contract to commit a breach thereof."
In Schultz v Butt 1986 3 SA 667 (AD), while dealing with the question of unfair competition NICHOLAS AJA at p679E stated that fairness and honesty are relevant criteria in deciding whether competition is unfair.
Applying the principles enunciated in the above quoted authorities, I am of the view that the second respondent was involved in an unlawful and unfair competition with the applicant. Mr Hattingh knowingly encouraged the employees of the applicant to perform duties for the second respondent, which duties they were performing utilising the resources of the applicant.
Furthermore, Mr Hattingh, with the assistance of the first respondent, established the second respondent, which was in competition with the applicant. First respondent also encouraged the applicant's customers to purchase products of the second respondent instead of the applicant's products.
The second respondent's counsel submitted that the applicant has no protectable interest.
0n the other hand, the applicant's counsel submitted that the applicant has a protectable interest despite having entered into a distributorship agreement with Verbac SA (Pty) Ltd.
The applicant entered into the agreement mentioned above as a result of the unlawful actions of its employees and the second respondent.
Phibro's products will still be sold to their customers and new customers via Verbac SA (Pty) Ltd. Applicant continues to hold the registration of all Phibro's products sold through Verbac SA (Pty) Ltd.
The said agreement was entered into in order to protect the market share of the applicant and to ensure that its customers continue to enjoy service.
An employee of the applicant, namely Ms Wessels, continues to take orders from customers and products are distributed via Verbac SA (Pty) Ltd.
In Ntsanwisi v Mbombi 2004 3 SA 58 (T) the court was dealing with a case involving a restraint of trade clause contained in a partnership agreement. At p63B BOTHA J said:

"In my view the applicant had a protectable interest in his connections with his patients. That is the interest that was protected by clause 9 of the partnership agreement."
The applicant's counsel, in my view correctly so, submitted that the customers and trade connections of the applicant are protectable interests, as the applicant still has an interest in the market place.
The submission by second respondent's counsel that the applicant does not have customers anymore, except one customer and therefore no protectable interest cannot be sustained.
The second respondent's counsel further submitted that the applicant has failed to demonstrate that the second respondent will continue in the future with the unlawful conduct, and therefore applicant is not entitled to an interdict.
The applicant stated that as a result of the unlawful activities of the respondents, it was obliged to enter into a distribution agreement in order to continue its business. It has terminated the services of all its employees, but one employee. Applicant concluded a distribution agreement with a distributor that has the ability to deploy a sales force and the technical staff in order to supply its products to their customers who might require said products.
As the applicant still has an interest to service its customers it cannot be said it is not possible for the second respondent to continue in the future with its unlawful activities.
The abovementioned submission by the second respondent's counsel cannot be sustained.
The first respondent admitted that some of the names appearing on annexure "JB37" were customers of the applicant. The applicant requires protection that its relationship with those customers should not be interfered with unlawfully.
It is not in dispute that the second respondent sold to Avi Pharm and Bio Care one of its products which competes with one of applicant's products. The said sales were eventuated in an unlawful manner, as amongst others, the resources, both financial and human, of the applicant were utilised.
In order to secure package bags for TM 200, the second respondent utilised the resources of the applicant.
The probabilities are that the first respondent made available to the second respondent the names of the customers of the applicant as the first respondent actively assisted the second respondent to unlawfully compete with the applicant.
My view is that on the papers the applicant has made out a case for a final interdict.
Second respondent apparently started doing business in April 2005. Its unlawful activities against the applicant lasted for over one year.
The applicant's counsel proposed a certain draft order and submitted that the applicant is entitled to an order in the terms proposed in the said draft order. In the proposed draft order the applicant's counsel suggested that the interdict should be for a period of one year.
I am in full agreement with the draft order prepared by the applicant's counsel.
0n 19 June 2007 the matter was postponed in order to give the second respondent an opportunity to file further papers if so advised. In my view, the second respondent should carry the costs of 19 June 2007. There is no reason not to order the second respondent to pay the said costs particularly taking into account the facts of this case and the manner in which the second respondent carried on its business.
The court therefore makes the following order:

It is ordered that for a period of one year from date of this judgment:

(1) The second respondent is interdicted and restrained from selling and/or distributing and/or tendering and/or offering for sale and/or marketing TMQ and Zinc Bacitracin and/or substitutes of TM 200 or TM 100 to customers of the applicant.

(2) The second respondent is interdicted and restrained from approaching and/or communicating with customers of the applicant in order to sell and/or distribute and/or tender and/or offer for sale and/or market products to them that are sold and distributed by the applicant or its agents or substitutes thereof.

(3) The second respondent is ordered to pay the applicant's costs, which costs will include the costs reserved on 19 June 2007.

W L SERITI

JUDGE OF THE HIGH COURT

12392-2007
HEARD ON: 9/10/2007

FOR THE APPLICANT: BRUINDERS SC

INSTRUCTED BY: BOWMAN GILFILLAN INC

FOR THE 2^ND RESPONDENT: ADV P F LOUW SC

INSTRUCTED BY: COUZYN HERTZOG & HORAK