- Appeal court rules restraint order against Maritz overbroad, suspends parts pending appeal, enforces only trade secrets clause, prospects of success on appeal considered.
- Judges highlight the risk of irreparable harm to Maritz if overbroad restraint is enforced immediately, stress fairness and balance between parties.
- Court clarifies that restraint of trade execution must be carefully tailored; future appeals cannot be bound by blanket orders.
The Western Cape High Court has upheld Pieter Maritz’s appeal against an enforcement order related to his restraint of trade with Truworths Limited. The court found that parts of the original order were overbroad and unfair.
Acting Judge DM Davis, delivering two other judges concurring, ruled that while the obligation to protect Truworths’ trade secrets remains enforceable, Maritz’s employment with Tyme Pte cannot be restricted.
Judge Davis emphasised that the restraint order was overbroad and should not have prohibited Maritz from being employed by any holding or subsidiary company of TymeBank or any entities connected with TymeBank. The court found that Truworths did not demonstrate that Tyme Pte competes with its business, noting that the two entities operate in separate markets for providing credit.
Overreach and risk of irreparable harm
The original order attempted to prevent Maritz from taking a job with TymeBank or any associated company, even if these entities were not in direct competition with Truworths. The judges highlighted that a loophole in the restraint of trade agreement cannot be fixed by judicial invention. Enforcing this overreach would have caused Maritz irreparable harm, as it could have jeopardised both his income and medical aid coverage for his son’s ongoing medical treatment.
However, the court recognised that some parts of the order still required enforcement. Paragraph 1.3 of the original restraint order, which prohibits Maritz from disclosing Truworths’ confidential trade secrets, remains in effect. Judge Davis noted that Maritz’s physical closeness to TymeBank employees increases the risk of disclosing confidential information, which could harm Truworths. The court also stated that complying with his obligations under this clause does not harm Maritz.
Balancing fairness and appeal prospects
While explaining the reasons for suspending parts of the restraint order pending appeal, Judge Davis stressed the need to balance exceptional circumstances against prospects of success on appeal. The short duration of restraint of trade orders does not automatically create exceptional circumstances, the judge explained, noting that the appeal against the overbroad restraint has good chances of success.
The court’s amended order states that the trade secrets clause remains in effect and enforceable, while the other parts restricting Maritz’s employment are suspended pending the final determination of all appeals. The judges also decided that each party should cover the costs of the section 18(3) application.
Judge Davis concluded that fairness dictates maintaining the default position, meaning the restraint order’s operation is suspended pending an appeal, while noting that Truworths’ interest in protecting confidential information justifies partial enforcement.
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