About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Eastern Cape High Court, Port Elizabeth
SAFLII
>>
Databases
>>
South Africa: Eastern Cape High Court, Port Elizabeth
>>
2011
>>
[2011] ZAECPEHC 59
|
|
Bikebuddi International Ltd v Bikebudi Holdings Ltd (3726/2011) [2011] ZAECPEHC 59 (13 December 2011)
11
IN THE HIGH COURT OF
SOUTH AFRICA
(EASTERN CAPE, PORT
ELIZABETH)
CASE NO: 3726/2011
Date Heard: 9 December
2011
Date Delivered: 13
December 2011
In
the matter between:
BIKEBUDDI
INTERNATIONAL LTD
….................................................................
Applicant
and
BIKEBUDI
HOLDINGS (PTY) LIMITED
….......................................................
Respondent
J U D G M E N T
DAMBUZA,
J
:
In this application,
brought as a matter of urgency, the applicant seeks an interim order
that a website under the address
www.bikebudi.net
be removed from the
internet and that the respondent be interdicted and restrained from
manufacturing or causing to be manufactured,
marketed, distributed
and/or sold, a “
Bikebuddi
trailer system”
pending
the finalization of anticipated arbitration proceedings between the
parties.
The trailer system which
is the subject of these proceedings was invented by the respondent.
It comprises of a motorcycle trailer
(also referred to as a
“
motorcycle transporter
” or “
the
product
”) which is securable to the tow hitch of a motor
vehicle.
Having developed the
trailer system and secured intellectual property rights (IPR) over
it, the respondent granted to the applicant
a licence to
manufacture, market and distribute the trailer system and to grant
sub-licences to agents in this and other countries.
The agreement in
terms of which the licence was granted to the applicant was
concluded by the parties on 13 July 2010 and became
effective on
that date.
In this application
NICO
FRANCOIS VENTER (Mr Venter)
, who deposed to an affidavit on
behalf of the applicant alleges that the respondent is in breach of
the terms of the licencing
agreement between the parties in that,
through the internet website mentioned above, the respondent markets
and distributes the
trailer system.
In opposing the
application, the respondent takes issue with the urgency with which
the matter was brought to court and contends
that, apart from the
applicant’s failure to meet the requirements for an interim
interdict, the applicant is, itself, in
breach of the agreement
between the parties and therefore the court should not exercise its
discretion in its (the applicant’s)
favour.
In the answering papers
the respondent also challenges the applicant’s
locus standi
and requires that the respondent be caused to file security for
costs. However, at the hearing of the application
Mr Rorke,
who
appeared on behalf of the respondent advised that the respondent had
abandoned these issues as it was desirous of having the
matter
finalized. The issues before me therefore are whether the matter was
properly brought on an urgent basis, whether the
requirements of an
interim interdict have been met by the applicant and whether, if
such requirements have been met, I should
exercise my discretion in
favour of the applicant by granting the order sought.
There is also an
application by the respondent for condonation of the late filing of
its answering affidavit. I may as well, at
this early stage state
that, for reasons that will become apparent later in this judgment,
I am satisfied that the late filing
of the answering affidavit was
through no negligence or tardiness on the part of the respondent.
URGENCY
In support of its
contention that the application merits consideration as a matter of
urgency the applicant contends, in the main,
that the quality and
safety of the trailer system marketed and distributed by the
respondent are causes for concern. It contends
that the product
marketed and sold by the respondent is “
inferior and
unsafe”
and that this “
will have the effect of
poisoning the public and its perception of the safety and value of
this product”.
In the founding affidavit
Mr Venter
states that it was the respondent’s inability to manufacture
the product to “
a desirable standard”
that led to
the conclusion of the licencing agreement between the parties.
[9] Indeed it is common
cause on the papers that in 2008 the respondent had a prototype of
the product tested by the SOUTH AFRICAN
BEREAU OF STANDARD (SABS).
The result was that certain aspects of the products were condemned by
SABS. The respondent contends
that subsequent thereto the product was
modified by the respondent and the condemned parts were removed or
rectified. This much
is confirmed,
to
some extent,
by
the applicant.
Mr
Venter
states
in the founding affidavit that
“
the
version of the product that the respondent tested with the SABS had a
rod that extend(s) through the hollow rear axle of the
motorcycle. In
the production version (as far as the applicant can glean from the
photographs on the website), the respondent has
replaced the rod with
a set of straps to support the wheel from below”.
1
[10] But even before I
consider the issue of the quality and safety of the product I first
deal, in particular, with the manner
in which the application came
before court, as pertinently and correctly raised by the respondent.
[11] According to the
founding affidavit
Mr Venter
became aware of the existence of
the offending website on 16 November 2011. Thereafter on 17 November
2010 the applicant’s
attorneys sent a letter to the respondent,
seeking an undertaking, within 48 hours, that the respondent should
remove the website
from the internet and stop manufacturing and
distributing the product. Having received no response to the letter
of demand the
applicant then launched this application on 24 November
2011. The application was served on the respondent on the same day it
was
launched. In the Notice of Motion the respondent was given until
17h00 on the day following service, to notify the applicant’s
attorneys of its intention to oppose the application and until 17h00
on 30 November 2011 (6 calendar days), to file its answering
papers.
[12] Furthermore the
application was set down on the unopposed motion roll for hearing on
Tuesday 6 December 2011 (14 calendar days
after it was launched). No
certificate of urgency was filed prior to its launch and it was never
brought to my attention as the
judge who would hear the application
or to the attention of any other judge prior to it being enrolled.
[13] Rule of practice 12
of the Rules of Practice (or Practice Directives) in this Court
provides that:
“
URGENT
APPLICATIONS
(a) In urgent applications:
“
The
practitioner who appears for the applicant must sign a certificate
of urgency which is to be filed of record
before
the papers are placed before the judge
in
which the reasons for urgency are fully set out…………”
(my
emphasis).
Details of why the
applicant alleges a matter is urgent should also be set out in the
founding papers.
(b) In all
applications brought as a matter of urgency, the matter should be set
down for hearing at a time which has been determined
as convenient
for the judge who is to hear the matter”.
[14]
Mr
Venter
explains
in the replying affidavit that the applicant’s Johannesburg
attorneys were advised by their local correspondents
that the
certificate of urgency need not be filed at the time of launching the
application; unless the intention is to move the
application on the
day that it is issued or when the matter is “
set
down on the unopposed roll and when the matter is heard becomes
opposed and you wish for the matter to be heard on that same
day”.
.
[15] Nothing can be
further from the truth. As apparent from a mere reading of the
Practice Directive the certificate of urgency
must be filed of record
before
the papers are placed before the judge
.
The Rule appears in this form in
Erasmus;
Superior Courts Practice.
2
I fail to understand what
the basis of the interpretation of this Rule by the applicant’s
attorneys could be.
[16] As submitted on
behalf of the respondent,
the
purpose of Rule of Practice 12 is to guide the Judge concerned,
without him or her reading the papers as such, as to the alleged
urgency and the propriety of hearing the matter on an urgent basis.
The correct procedure in this case was to have the certificate
of
urgency placed before me and the matter pertinently brought to my
attention or the attention of the duty judge during the preceding
week(s), rather than it being enrolled in the unopposed motion roll
at the applicant’s sole discretion. The fact that the
day
chosen by the applicant for the hearing happened to be a day on which
unopposed applications are usually heard does not justify
non
compliance with the Rule.
Had
the applicant complied with the Rule, the application would, in all
probability, not have been set down for hearing on an urgent
basis.
[17] This issue is not a
mere “
technical defence
” as the respondent
contends. Practice Directives complement the Rules of Court. They are
designed to promote efficiency in
the functioning of the Courts and
to inform the parties as to what the courts expect of them in respect
of the practice and procedure
of the Court. One should not even have
to say this but it is incumbent on the practitioners to acquaint
themselves and comply with
these Rules and Directives. And it is
rather surprising, to say the least, that the applicant entertains
hope that it could be
awarded costs occasioned on a day that the
matter was improperly enrolled.
[18] Further, and in any
event, the applicant has in my view failed to show that the
curtailment of the time periods stipulated
in Rule 6 of the Uniform
Rules of Court was justified. The circumstances which, as alleged on
behalf of the applicant, render the
matter urgent and departure from
the rules justifiable, have been stated above. My view is that these
circumstances, as set out
in the founding papers amount to nothing
more than mere speculation and unsubstantiated allegations.
[19]
Although
in the replying affidavit the applicant contends that its concerns
over the safety and quality of the trailer system are
not the only
reasons the application was brought on an urgent basis,
it
seems to me that they are the main factors on which the applicant
relies for urgency. The applicant maintains that it also relies,
for
urgency, on concerns about public perceptions, the protection of the
applicant’s markets both nationally and abroad,
the protection
of the applicant against consumer claims and the preservation and
protection of its potential revenue stream relating
to the trailer
system. I am of the view that the concerns about public perceptions
and protection against consumer claims find
their origin in the
concerns about the perceived inferior quality and unsafe nature of
the product, to which I shall revert shortly.
[20] The concerns about
the applicant’s market and preservation of the applicant’s
potential revenue stream from the
product are, in reality, one and
the same concern which emanates from the applicant’s rights
deriving from the licencing
agreement. The applicant’s case in
this regard is that the licencing agreement entitles it to the
markets with which the
respondent is now interfering. I do not
consider it necessary to deal in any depth with this issue as it will
be properly determined
at the arbitration proceedings. But it does
appear that, at the time of launching the application the applicant
should have anticipated
that a dispute of fact would probably surface
as to whether the applicant is, in infact, entitled to the rights
deriving from the
agreement. The respondent’ version is that:
1 since 2008 the
applicant has failed to perform its obligations under the agreement;
2
Mr Venter
had
expressed a desire to have the applicant released from the licencing
agreement as it wished to market and distribute a trailer
system
developed by the respondent’s competitor,
Mr Kotlar;
and
3 the respondent had
cancelled the agreement in a letter forwarded to the applicant’s
domicilium citandi et executandi,
in Hong Kong.
[21]
It is trite that where,
in
proceedings on notice of motion,
dispute
of facts arise on the affidavits, the relief sought may be granted
only if the facts averred in the applicant’s affidavits
that
have been admitted by the respondent, together with the facts alleged
by the respondent, justify the order sought.
3
I am
not satisfied that the rights to the markets and to protection of
income, deriving from the agreement, and which the applicant
urgently
seeks to protect have been established on the papers. Therefore any
urgency based thereon is unsubstantiated.
[22] Reverting to the
applicant’s concerns about the quality and safety of the
product as the basis for urgency my view is
that these concerns are
based on speculation rather than established facts or facts
reasonably believed by the applicant. It is
trite that an affidavit
is a solemn assurance of a fact known to the person who makes the
statement. In the founding papers the
applicant prefaces its concerns
by stating that it “
has no way of knowing whether the
trailer systems produced by the respondent is of adequate
specification, quality, engineering
and safety standards”.
Nevertheless the applicant proceeds to make definite bold
pronouncements on the quality and the safety of the product.
[23] I can only conclude
from the papers that the applicant’s concerns are based on the
condemnation, by SABS of certain parts
of the prototype developed and
tested in 2008, to which I have already referred. Although this much
is not clear from the evidence,
it seems to me that the applicant’s
reasoning is that since the prototype was condemned the product
currently on the market
must necessarily be of a sub-standard
quality, unsafe and poses danger to the users of the product. But
there is no evidence on
the papers to show that the absence of
certification by SABS is support for the applicant’s suspicions
about the quality
and safety of the product.
[24] More significant in
this application is the fact that even if the quality and safety of
the product is compromised there is
no evidence as to the extent to
which the condition of the product constitutes such danger as to
justify non-compliance with the
Rules of this Court to the extent
that the applicant has done. There is no evidence of complaints by
users of the product and no
evidence as to the particular
shortcomings of the product. The impression I get from the evidence
before me is that on becoming
aware of the existence of the website
no investigation was done by or on behalf of the applicant as to when
the website was set
up, how long the product has been on the market
and what its track record has been for that time. These are some of
the fundamental
investigations which, in my view, the applicant
should have conducted to properly determine which relief to seek if
and when approaching
the Court.
[25] In the end my view
is that no proper case has been made out for urgency with which the
application has been brought and, on
that ground alone, the
application must fail.
[26]
The respondent seeks costs consequent upon the employment of two
counsel. The applicant contends that such an order for costs
is not
justified. In considering the question of costs the court has
adiscretion,
to
be exercised judicially,
upon
consideration of the facts of each case. In essence,
the
decision is a matter of fairness to both sides.
4
My
view in this case is that the applicant in launching the application
on an urgent basis escalated the level of effort with which
it had to
be considered by the respondent. It was therefore fair and reasonable
for the respondent to pool as much resources as
it could summon to
adequately consider the matter in order to be able to respond within
the stringent time limits set by the applicant
(or as reasonably soon
thereafter as was possible in the circumstances). I am therefore
satisfied that the employment of two counsel
was reasonable in this
matter and that the applicant is entitled to the costs consequent
thereto.
For the above reasons:
The application is
struck off the roll;
the applicant is ordered
to pay the respondent’s wasted costs; such costs to include
the costs consequent upon the employment
of two counsel.
_________________________
N. DAMBUZA
JUDGE OF THE HIGH
COURT
Appearances
:
For the Applicant: Adv.
C. K Mey instructed by Douglas Smart Attorneys of Sandton and c/o
Daniel & SACS INC. Port Elizabeth
For the Respondent: Mr.
SC Rorke instructed by Pieterse attorneys of Port Elizabeth
1
Page
18 of founding affidavit.
2
At
D-7
3
Plascon
Evans Ltd v Van Riebeeck Paints (Pty) Ltd
1984(3)
SA 623 at 634H-I.
4
Fripp
v Gibbon & Co 1913AD354
11