A recent Western Cape High Court ruling showed that Sports Trader had a point when we said that the September 2018 letter Pepkor sent to Tekkie Town suppliers, warning that they should be careful of supplying goods to the Mr Tekkie team as they have commenced court action against them, was a tad premature. Or perhaps a bit of wishful thinking, as we wrote in the Q4 2018 article “Uncompetitive bullying in the industry?”
Judge Elizabeth Baartman last week dismissed – with cost – Pepkor’s application to submit an unverified list of footwear they wanted to prevent Mr Tekkie from stocking. On Monday she also granted the former Tekkie Town (TT) shareholders leave to appeal against her restraint of trade judgement at the end of last year.
As far as restraint of trade rulings go, this was most interesting: the judge ruled that the respondents (ex-Tekkie Town shareholders) have a right to earn a living and that they “would be able to continue operating Mr Tekkie stores and roll out stores as envisaged”, BUT that they may not be involved in a business that trades in footwear listed in Annexure A.
This Annexure A referred to the footwear styles that the former TT owners traded in up to 1 October 2016. That is the date when TT became part of Steinhoff via a share swap (contested in another court case). Judge Baartman ruled that Steinhoff subsidiary Pepkor had to submit the list of styles stocked by TT on that date to the court as Annexure A, which also had to be verified by the respondents.
As any hands-on retailer will know, it would be very difficult to recreate a list of every footwear style – not the brands, but specific styles – in stock on a specific day more than two years in the past. As Pepkor realised.
On February 28 Judge Baartman dismissed Pepkor’s rule 42 application to belatedly submit an adapted version of Annexure A … with costs, from day one.
“The true position is that on the day of the hearing Pepkor and their counsel made a commitment to make available the list to the respondents and the court,” says one of the respondents, Bernard Mostert. “They never did so. Instead they attempted to do so opportunistically after an order was made and then twisted the narrative implying that the order was against Mr. Tekkie.
“Despite their attempts to publish three different lists over a period of almost four months, it is clear that they tried to be judge and juror in respect of the list. We are grateful that Judge Baartman dismissed Pepkor’s application to introduce a list that was never in front of the court and ourselves.”
The following Monday Judge Baartman also granted the former TT shareholders leave to appeal the restraint of trade judgement.
The litigants will be back in court in the beginning of June when Pepkor will argue that the Mr Tekkie name and branding infringes the Tekkie Town trademark.
There are currently 16 Mr Tekkie stores, with three more due to open soon, which stock most of the current popular lifestyle clothing and footwear brands. The founders emphasise that the styles and many of the brands differ from the athletic footwear offering of Tekkie Town because they want to differentiate between the two chains in anticipation of the day when they get Tekkie Town back if the court rules that the Steinhoff share swap deal was illegal … as they hope to argue soon.