South Africa: Unlawful Competition And Confidential Information

Last Updated: 13 November 2014
Article by Don MacRobert and Refiloe Nene

Most Read Contributor in South Africa, July 2019

ENSafrica has successfully represented one of its clients in an unusual unlawful competition case, one involving the misappropriation of confidential information. On 21 October 2014 Judge Weiner of the South Gauteng High Court handed down her judgment in the case of Southern African Institute of Chartered Secretaries and Administrators ('the Institute) v Careers-In-Sync.

The Institute regulates the training and other affairs of accredited company secretaries in South Africa. One of the services it offers its members is assistance with finding jobs. To do this, the Institute has what's referred to as an 'Appointments Register', which contains detailed information of its members. The Appointments Register has been around since 1957 - although initially contained in a lever arch file, it was subsequently computerised and captured on a CD.

Although the Institute initially ran the employment service itself, it outsourced this function to an individual in 2002, and later to Careers-In-Sync in 2006. When the Institute appointed Careers-In-Sync it handed over the Appointments Register, in other words the lever arch file and the CD.

The parties also signed a Service Level Agreement (SLA) that imposed obligations on both parties. For example, Careers-In-Sync – which was charged with the 'maintaining of an appointments register of members seeking employment opportunities' for and on behalf of the Institute - undertook to treat all information relating to the Institute and its members and clients confidentially, and it agreed not to compete with this recruitment service. The Institute, on the other hand, undertook to refer any queries from employers to Careers-In-Sync rather than to the members themselves or other agencies, and to provide Careers-In-Sync with a mechanism for verifying the good standing of members.

Careers-In-Sync ran the service until 31 December 2013 when it decided not to renew the contract. It also decided to hold on to the Appointments Register, a decision that forced the Institute to approach the High Court for its return. The Institute sought an interdict (injunction) which would stop Careers-In-Sync from using or disclosing the Appointments Register to others.

The Institute based its claims on the delict (civil wrong or tort) of unlawful competition. This prompted Careers-In-Sync to raise a preliminary legal point that went like this: the relationship between the parties is a contractual one; what you're in fact alleging is that it was an implied term of the contract that we would return the Appointments Register when the agreement came to an end; so you should have brought your claim under contract law rather than the law of delict. Careers-In-Sync relied on the famous case of Lillicrap, Wassenaar & Partners v Pilkington Brothers (SA) (Pty) Ltd 1985 (1) SA 274 (A), where the court held that delictual actions should generally not be extended to duties subsisting between the parties to a contract of professional services. But the judge rejected this preliminary point because there is also authority - Holtzhausen v ABSA Bank Ltd 2008 (5) SA 630 - that concurrence of actions is possible where same facts give rise to a claim for damages in delict and in contract, which means that a party can choose which route to follow.

The judge then considered the unlawful competition claim. She looked at various decided cases and made the point that, although the law says that everyone is entitled to compete, the right is not absolute and it must be kept within lawful bounds. In order to determine whether an action is wrongful or unlawful the court must have regard to vague and elastic criteria like fairness and honesty. As the court said in the famous case of Atlas Organic Fertiliser (Pty) Ltd v Pikkewyn Guano (Pty) Ltd 1981 (2) SA 173 (T), the 'norm to be applied is the objective one of public policy... the general sense of justice of the community, the boni mores (good morals), manifested in public opinion.'

The judge pointed out that there have been cases involving misuse of confidential information which suggest that the relationships involved may be that of employer/employee or principal/agent. There have also been cases that suggest that there is a legal duty to respect confidentiality outside of a contractual relationship. In this case it wasn't exactly clear what the nature of the relationship between the parties was in legal terms, but it was probably one of mandate. What mattered was that Careers-In-Sync undertook to provide certain services and it was therefore the Institute's service provider.

The judge referred to the well-known South African case of Dun and Bradstreet (Pty) Ltd v SA Merchants Combined Credit Bureau (Cape) Pty Ltd 1968 1 SA 209 (C), where the court approved this statement that appears in the UK decision of Seagar v Copydex: 'The law on the subject does not depend on any implied contract. It depends on the broad principle of equity that he who has received information in confidence will not take unfair advantage of it. He must not make use of it to the prejudice of him who gave it without obtaining his consent.' The judge in Dun and Bradstreet also quoted this from the UK case of Terrapin: 'A person who has obtained information in confidence is not allowed to use it as a springboard for activities detrimental to the person who made the confidential communication.'

According to Dun and Bradstreet, it's necessary to establish the following in order to succeed in a confidential information case: that you have a quasi-proprietary right or legal interest in the information; that the information has the necessary quality of confidentiality; that there is a relationship that imposes a duty on the other party to preserve confidence; that the other party knew that the information was confidential and understood its value; and that the other party is in improper possession of the information and is likely to use it to your detriment.

The judge felt that all these requirements had been met. The Institute had a right to the information – the judge rejected Careers-In-Sync's argument that the information was theirs, because all the information had been accumulated as a consequence of the agreement. The information was clearly confidential – the judge rejected Careers-In-Sync's argument that the confidence attached to the members and not the Institute, because it had been accumulated on behalf of the Institute. Clearly the information had an economic value. As regards the issue of improper possession, the morals of the marketplace were such that Careers-In-Sync could not realistically have anticipated that it would be entitled to keep the Appointments Register on expiry of the contract. And clearly Careers-In-Sync would gain an unfair advantage or 'springboard' if it kept it.

So the judge granted an order interdicting Careers-In-Sync from using or disclosing the Appointments Register and from soliciting business from persons who appear in the Appointments Register. She also ordered Careers-In-Sync to deliver-up the hard copies and CDs. A resounding success for the Institute. As well as the concept of fair competition!

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions