About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Supreme Court of Appeal
SAFLII
>>
Databases
>>
South Africa: Supreme Court of Appeal
>>
2011
>>
[2011] ZASCA 169
|
|
Zietsman v Electronic Media Network Ltd and Another (771/2010) [2011] ZASCA 169; 2011 BIP 30 (SCA) (29 September 2011)
Links to summary
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
C
ase No:
771/2010
In the matter between:
DAVID WALLACE ZIETSMAN
….........................................
APPELLANT
and
ELECTRONIC MEDIA NETWORK
LIMITED
….................................................................
FIRST
RESPONDENT
MULTICHOICE AFRICA (PTY)
LIMITED
S
................................................................
ECOND
RESPONDENT
Neutral citation:
Zietsman
v Electronic Media Network
(771/2010)
[2011] ZASCA 169
(29
September 2011)
Coram:
Mthiyane, Van
Heerden, Bosielo and Leach JJA and Meer AJA
Heard: 13 September 2011
Delivered: 29 September 2011
Summary: Application for
security for costs ─ s 17(2) of
Patents Act 57 of 1978
─
Earlier application dismissed on appeal to the SCA ─ Whether
second application precluded by the operation of doctrine
of res
judicata or issue estoppel.
_____________________________________________________________________
ORDER
On appeal from:
Court of
the Commissioner of Patents (Pretoria) (Sapire AJ sitting as court of
first instance):
The appeal is dismissed with
costs.
___________________________________________________________
JUDGMENT
MTHIYANE JA (VAN HEERDEN,
BOSIELO, LEACH JJA and MEER AJA CONCURRING):
[1] This appeal is against the
judgment of Sapire AJ sitting as a Commissioner of Patents in the
Court of the Commissioner of Patents
of the Republic of South Africa,
in which the appellant was ordered to furnish security for the costs
of the first and second respondents
jointly in the amount of R100
000.
[2] The application that gave
rise to this appeal is the second application for security for costs.
The appellant was previously
ordered to furnish security for the
costs of the respondents in the amount of R250 000 each. The
appellant noted an appeal against
that ruling and succeeded. The
judgment in that case is reported as
Zietsman v Electronic Media
Network Ltd & others
2008 (4) SA 1
(SCA), (the SCA judgment).
The appellant’s answer to the respondents’ request for
security for costs was that, in light
of the SCA’s judgment,
the respondents were precluded from seeking further security from the
appellant as the matter was
res judicata.
The history of the matter
[3] It is necessary to describe
briefly the background to the present application. In December 2004
the appellant instituted action
against the first and second
respondents and three other entities for the alleged infringement of
his South African patent number
92/9925. This action (the main
action) is pending in the court below.
[4] On 15 February 2005 the
respondents requested security for costs in terms of Uniform rule
47(1).
[5] The respondents thereafter
brought the first application for security for costs in the court of
the Commissioner of Patents
and the appellant was ordered to furnish
security. This order formed the subject of the appeal in the SCA
judgment.
[6] On 7 March 2008 the
appellant’s appeal against the order on the first application
for security for costs was upheld and
the order of the Commissioner
of Patents was altered to one dismissing the respondents’
application with costs.
[7] Although this court made
findings adverse to the appellant’s ability to satisfy an order
for costs that may be given against
him, it refused the respondents’
application on the basis that they had not disclosed a defence and
because evidence relating
to their defence and their prospects of
success in the main action had not been tendered.
[8] On 10 June 2008, the
respondents again requested security for costs in terms of Uniform
rule 47(1). This time the notice under
Uniform rule 47(1) contained,
inter alia, statements indicating that the respondents had good
prospects of success in their defence
of the main action.
[9] The appellant refused to
offer security for costs in response to the respondents’
aforesaid (second) request and the respondents
then launched their
second application for security for costs before the court a quo on
28 August 2008.
The issue on appeal
[10] The issue for decision in
this appeal is whether the second application for security for costs
should have been refused by
the court a quo because of the operation
of res judicata or issue estoppel. The underlying ratio of the
doctrine of res judicata
is that where a cause of action has been
litigated to finality between the same parties on a previous
occasion, a subsequent attempt
by one party to proceed against the
other party on the same cause of action should not be permitted. The
constituent elements of
this defence are: (a) an earlier judicial
decision, (b) which is final and definitive of the merits of the
matter; (c) involving
the same parties; (d) where the cause of action
in both cases is the same; and (e) the same relief is sought.
1
[11] Where a defendant raises the
defence that the same parties are bound by a previous judgment on the
same issue, it has become
commonplace to refer to this defence as one
of ‘issue estoppel’. The essential requirements of issue
estoppel are:
(a) an earlier judicial decision; (b) which is final
and definitive of the merits of the matter; (c) involving the same
parties;
and (d) which involves an issue of fact or law which was an
essential element of the judgment on which reliance is placed.
2
[12] The appellant’s
primary submission is that this court has in the SCA judgment ruled
on the appellant’s liability
to furnish security and that the
respondents are precluded from again approaching this court on the
matter in circumstances where
the respondents have not introduced any
new evidence that was not available when the matter was first before
this court.
[13] The respondents submit that
the appellant has failed to discharge the onus of proving the
sustainability of the defence of
res judicata or issue estoppel. They
accept that the SCA judgment has the following elements in relation
to the judgment of the
court a quo: (a) an earlier judicial decision;
(b) which involves the same parties; and (c) where the same relief
was sought. The
respondents however, dispute that the SCA judgment is
a final and definitive judgment on the merits of the first
application for
security for costs and aver further that the causes
of action in both applications for security for costs are not the
same.
[14] In order for the defence of
res judicata to be sustained it must be shown that the earlier
judicial decision on which reliance
is placed was a decision on the
merits. It has been said that, ‘it is not the form of the order
granted but the substantive
question (did it decide on the merits or
merely grant absolution?) that is decisive in our law and that what
is required for the
defence to succeed is a decision on the merits.’
3
The respondents submit that the
SCA judgment was one of absolution from the instance. As indicated
above they submit further that
the causes of action in both
applications for security for costs are not the same.
[15] On an analysis of the SCA
judgment (especially paras 19 and 20), it is clear that the ratio for
the decision was that insufficient
evidence had been placed before
the court and the respondents had not disclosed a defence.
4
Neither the respondents’
defence, nor their prospects of success in the main action were dealt
with in the first application.
This caused this court to hold that it
would place an unjust impediment on the appellant’s
constitutional right in terms
of s 36 of the Constitution were the
court to direct the appellant to furnish security for costs. The
respondents’ application
for security for costs was thus
dismissed.
[16] In my view the effect of the
SCA judgment is that it only granted absolution from the instance. It
clearly did not deal with
the merits. It is simply not so as
contended by the appellant that the merits were considered in detail.
Accordingly, the doctrine
of res judicata cannot be relied on by the
appellant to prevent adjudication of the respondents’ second
application for security
for costs.
[17] As already indicated above,
one of the elements underlying the defence of res judicata is that
the earlier judicial decision
relied on must be in respect of the
same cause of action. In the respondents’ second application
for security for costs the
respondents have not only relied on
essentially the same facts on which the SCA judgment is based, but
have in addition tendered
new evidence. This new evidence deals with
the respondents’ prospects of success in the main action and
cures the deficiency
that resulted in the respondents being
non-suited in the first application. The evidence now shows that the
respondents have good
prospects of success in the main action and
that there is therefore a good prospect of an adverse costs order
being made against
the appellant at the termination of the main
action.
[18] The evidence now tendered
relates to the respondents’ application in terms of
s 51(10)
of
the
Patents Act 57 of 1978
which identifies 15 grounds for the
setting aside of the amendment which was made by the appellant to his
patent. If this application
succeeds, the appellant’s patent
may become wholly or partially invalid. It is important to note that
this application was
made only after the first application for
security of costs had been instituted. So too, the affidavit deposed
to by the respondents’
expert, Mr Hanrahan, had only become
available during the course of the previous proceedings for security
for costs.
[19] The further evidence
tendered by the respondents shows, at least prima facie, that the
respondents could not have infringed
the appellant’s patent.
This evidence was not before the court in the first application.
Clearly, the second application
is premised on a cause of action
which is different from the cause of action in the first application.
[20] On this basis the doctrine
of res judicata (as such or in the form of issue estoppel) is
inapplicable. There was therefore
no reason for the Commissioner of
Patents, Sapire AJ, not to entertain the respondents’
application. His approach finds support
in the dictum of Hefer JA in
Shepstone & Wylie & others v Geyser NO
1998 (3) SA
1036
(SCA) at 1042H where the court said in relation to refusal of an
application for security for costs:
‘
It
may be that the Court, having once refused an application, retains
the power to entertain a subsequent one. But any subsequent
application will obviously require new evidence.’
[21] During argument the question
arose as to whether it was open to the respondents to rely on
evidence which they did not raise
in the first application, when they
had the opportunity to do so. The appellant submitted that they were
not entitled to do so.
The respondents offered two reasons why the
evidence was not tendered in the first application. First, the
evidence in question
only came into their possession after the first
application had been lodged. Second, the respondents did not consider
themselves
under any obligation, at that stage, to incur the
additional expense of tendering evidence on their prospects of
success. The appellant’s
allegations of patent infringement
were considered to be without any merit and the respondents did not
consider it necessary to
investigate (in the appellant’s words)
‘all aspects regarding the patent, possible infringement and
possible invalidity,
of the claims’ before applying for
security for costs at the earliest possible opportunity. At that
stage, given their view
of the strength of the respondent’s
case, this would have been unduly expensive and time-consuming. In
terms of
s 17(2)(
b
) of the
Patents Act, the
Commissioner of
Patents is not obliged to have regard to the prospects of success of
any party in considering whether security
should be furnished. The
section reads as follows:
‘
The
Commissioner
may
have
regard to the prospects of success or the
bona
fides
of
any such party in considering whether such security should be
furnished.’ (Emphasis added.)
[22] In my view the respondents
have provided a satisfactory explanation as to why evidence regarding
their defence and their prospects
of success was not tendered in the
first application. The appellant argued that the respondents’
failure to disclose their
defence in the first application amounts to
an abuse of the process of court. I do not agree that any abuse has
been established
and the submission to that effect falls to be
rejected.
[23] In sum the plea of res
judicata cannot be upheld and was correctly rejected by the
Commissioner of Patents.
[24] As to costs I do not think
that the matter justified the employment of two counsel. The appeal
did not raise complex or novel
issues. In essence, this court simply
had to consider whether the order for security for costs given by the
court a quo was liable
to be set aside on the basis of res judicata.
Order
[25] In the result the following
order is made:
The appeal is dismissed with
costs.
______________________
K K MTHIYANE
JUDGE OF APPEAL
APPEARANCES
For Appellant: AGS Galgut
Instructed by:
Galgut & Galgut, Johannesburg
McIntyre & Van der Post,
Bloemfontein
For Respondent: P Ginsburg SC
(with him F Southwood)
Instructed by:
Adams & Adams, Pretoria
Honey Attorneys, Bloemfontein
1
See
Yellow Star Properties 1020 (Pty) Ltd v
MEC, Department of Development Planning & Local Government,
Gauteng
2009 (3) SA 577
(SCA) para 21.
2
Yellow
Star Properties
para 22.
3
See
MV Wisdom C: United Enterprises
Corporation v STX Pan Ocean Co Ltd
[2008] ZASCA 21
;
2008
(3) SA 585
SCA para 9.
4
Zietsman
supra para 19 at 9J-10J.