A short-term insurance broker applied to enforce confidentiality and restraint of trade undertakings against former employees. The court found that the broker’s interests are protectable and restrained the former employees from being employed by another broking company and using their former employer’s confidential information.
The employees applied for leave to appeal that decision. The broker in turn launched an urgent implementation application in terms of the Superior Courts Act, to confirm that the operation of the original court order would not be suspended for the duration of the application for leave to appeal, and would continue to operate and be executed until the final determination of all present and future leave to appeal applications and appeals (including any prospective application for leave to appeal to the Supreme Court of Appeal.
The applications for leave to appeal and for implementation of the original court order were heard together.
Notwithstanding that the application for leave to appeal was ultimately dismissed, the court considered the implementation application and the relief sought by the broker.
The determination of whether to grant an implementation order involves the exercise of discretion concerning all the facts. To be successful, an applicant must demonstrate exceptional circumstances, that the applicant will suffer irreparable harm if an order is not made, and that the respondents will not suffer irreparable harm if an order is made. The court noted that the overarching enquiry is whether or not exceptional circumstances exist. The presence or absence of irreparable harm may be subsumed under the overarching exceptional circumstances enquiry.
The court recognised that even though the employees’ leave to appeal application was refused they may apply to the Supreme Court of Appeal for leave to appeal and in the unlikely event that an appeal is then heard, the restraint periods would either have expired or a substantial portion of the restraint periods would have expired, rendering any judgment on appeal moot and the relief sought by the broker enforcing the restraints of trade would be forfeited. In the interim, the employees continuing to act contrary to the court order had caused considerable harm to the broker.
This conduct would continue to cause further damage and harm to the broker, which was not likely to be realistically recoverable from the employees. This was balanced against the possible losses that the employees might suffer if the implementation order was granted, which if established, would be recoverable from the broker.
The court held that the broker’s implementation application must succeed despite the dismissal of the application for leave to appeal. The final order confirmed that the implementation of the initial restraint of trade order would not be suspended and would be enforceable for the duration of the application for leave to appeal and prospectively, including any application to the Supreme Court of Appeal and any further proceedings pending final determination.
In making the order, it is unclear if the court considered that the Superior Courts Act affords an automatic right of appeal to the aggrieved party (in this case, the employees) in these circumstances and provides that the order confirming implementation would be automatically suspended pending the outcome of such an appeal.