Clipsal Australia (Pty) Ltd and Others v Gap Distributors (Pty) Ltd and Others (657/08) [2009] ZASCA 49; 2010 (2) SA 289 (SCA) ; [2009] 3 All SA 491 (SCA) (25 May 2009)

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[2009] ZASCA 49
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Clipsal Australia (Pty) Ltd and Others v Gap Distributors (Pty) Ltd and Others (657/08) [2009] ZASCA 49; 2010 (2) SA 289 (SCA); [2009] 3 All SA 491 (SCA); 2009 BIP 251 (SCA) (25 May 2009)

Links to summary

THE
SUPREME COURT OF APPEAL
REPUBLIC
OF SOUTH AFRICA
JUDGMENT
Case No: 657/08
CLIPSAL AUSTRALIA
(PTY) LTD First
Appellant
CLIPSAL SOUTH
AFRICA (PTY) LTD Second Appellant
SCHNEIDER
ELECTRIC SOUTH AFRICA (PTY) LTD Third Appellant
and
GAP DISTRIBUTORS
(PTY) LTD First Respondent
LEAR IMPORTS
(PTY) LTD Second Respondent
SHIMON
BOTBOL Third Respondent
REGISTRAR OF
DESIGNS Fourth Respondent
THE MINISTER OF
THE DEPARTMENT OF TRADE
AND
INDUSTRY Fifth Respondent
Neutral
citation:
Clipsal
Australia v Gap Distributors
(657/08)
[2009] ZASCA 49
(25 May 2009)
Coram:
STREICHER
ADP, CLOETE, SNYDERS JJA, HURT & TSHIQI AJJA
Heard:
4
MAY 2009
Delivered:
25
MAY 2009
Summary: Judgment
staying judicial proceedings pending the determination of other
judicial proceedings held to be appealable.
______________________________________________________________
_______
ORDER
_____________________________________________________________________
On appeal from: High Court
Johannesburg (Joffe J sitting as court of first instance).
1 The appeal succeeds with costs
including the costs of two counsel.
2 The order of the court below is
set aside and replaced with the following order:
‘
The application for a stay of
the proceedings pending the determination of the review application
in case no 19081/08 in the High
Court, Pretoria is dismissed with
costs.’
_____________________________________________________________________
JUDGMENT
_____________________________________________________________________
STREICHER ADP (CLOETE, SNYDERS
JJA, HURT and TSHIQI AJJA concurring)
[1] This is an appeal against a
judgment by Joffe J in the High Court, Johannesburg,
1
in terms of which he stayed an application (‘the contempt
application’) by Clipsal Australia (Pty) Ltd (‘Clipsal
Australia’),
Clipsal South Africa (Pty) Ltd (‘Clipsal SA’) and
Schneider Electric South Africa (Pty) Ltd (‘Schneider’)
(hereinafter
jointly referred to as the appellants) against Gap
Distributors (Pty) Ltd (‘Gap’), Lear Imports (Pty) Ltd (‘Lear’)
and
Mr Shimon Botbol (‘Botbol’) (hereinafter jointly referred to
as the respondents). The application was for an order holding the

respondents guilty of contempt of court in that by importing and
disposing of certain single and double electrical sockets they

disobeyed an order of court. The appeal is with the leave of the
court below.
[2] The order of court allegedly
disobeyed is an order by this court, in terms of which it replaced an
order by the High Court,
Johannesburg, pursuant to an application
(‘the first Clipsal application’) by Clipsal Australia and
Clipsal SA, as the proprietor
and local exclusive licensee
respectively of registered design A96/0687, against Gap Distributors
and Trust Electrical Wholesalers
both of which are firms owned by
Gap.
2
The order interdicted Gap Distributors and Trust Electrical
Wholesalers from infringing registered design A96/0687 by making,
importing, using or disposing of certain Lear G-2000 series single
and double electrical sockets (‘Gap sockets’).
[3] Subsequent to the court order
Botbol, who is the sole shareholder and the managing director of Gap,
caused Lear, which was a
close corporation at the time, to be
converted into a company of which he is the sole shareholder and
director. Thereafter Lear
applied to the High Court, Pretoria (‘the
Lear application’) for an order –
(a) declaring that the word
‘original’ in
s 14(1)(a)(ii)
of the
Designs Act 195 of 1993
has a different meaning to the one ascribed to it by this court in
the first Clipsal application; alternatively
(b) declaring that
s 14(1)(a)
alternatively
s 20(1)
of the
Designs Act is
inconsistent with the
constitution; and
revoking Design A96/0697.
[4] Prior to this court’s order
against Gap Distributors and Trust Electrical Wholesalers, Lear was
not in the business of importing
and selling electrical sockets in
South Africa but subsequent to the order it started selling such
sockets (‘Lear sockets’).
This gave rise to the contempt
application. The appellants contend that the Lear sockets differ only
in immaterial respects from
the Gap sockets and the sockets that are
the subject of the registered design; that Gap and Lear are but
Botbol in different guises
and that the corporate veil between them
should be pierced. The respondents opposed the application and lodged
a counterclaim for
the same relief as had been claimed in the Lear
application.
[5] Upon application by the
appellants the Lear application was stayed pending the final
determination of the contempt application.
Although it was common
cause in the first Clipsal application that the design had been
registered in respect of class 13 and although
this court held in
that case that the design was new and original, the respondents, in
the contempt application, as in the Lear
application, contend that
the registration of the design is invalid in that no class is
reflected in the register of designs and
also in that the design is
not new or original. They contend that the design is not new in the
sense in which this court interpreted
the requirement of originality
and also in the sense contended for by them. According to them the
originality requirement adopted
by this court was adopted in breach
of this court’s constitutional duty to interpret legislation in a
manner that promotes the
spirit, purport and object of the Bill of
Rights. In the alternative, if this court’s interpretation of the
originality requirement
is the only interpretation that the
requirement is reasonably capable of, they contend that the
requirement is unconstitutional
because it unjustifiably restricts
‘constitutional rights to freedom of expression and freedom of
trade, occupation and profession’.
[6] In a yet further application
instituted by Lear in the High Court, Pretoria against the Registrar
of Designs, Clipsal Australia
and Schneider, Lear applied for the
review of the ‘registration of application A96/0687 in Part A of
the Register without a classification
having been recorded in the
Register, in contravention of
Section 15(1)
of the Designs Act’.
The register referred to is the register of designs.
[7] At the hearing of the
contempt application the respondents argued
in
limine
that it should
be stayed pending the determination of the review application. The
appellants argued the contrary. The court below
held that, in light
of the fact that it is not apparent from the register of designs that
the design was registered in class 13,
the appellants’ entitlement
to the relief which they sought in the first Clipsal application was
suspect and that it had a discretion
to stay the contempt application
if it considered it to be in the interests of justice to do so. It
thereupon stayed the contempt
application pending the determination
of the review application on the basis that it was indeed in the
interests of justice to
do so. An application by the appellants for
leave to appeal against the judgment was opposed by the respondents
on the ground,
among others, that it was not a final judgment and
therefore not appealable. In dismissing this argument Joffe J said
that the
appellants were confronted with a judgment which effectively
precluded them from enforcing the order they had in their favour,
that registration of the design was due to terminate on 22 July 2011,
that the parties could still be litigating by that time and
that the
effect of the order staying the determination of the application was
final in effect and thus appealable.
Is the order of the court
below appealable?
[8] The order by the court below
will only be appealable if it qualifies as a ‘judgment or order’
within the meaning of those
words in the context of s 20(1) of
the Supreme Court Act 59 of 1959 (see
Zweni
v Minister of Law and Order
1993 (1) SA 523
(A) at 531B-C). Such a judgment or order ‘is a
decision which, as a general principle, has three attributes, first,
the decision
must be final in effect and not susceptible of
alteration by the Court of first instance; second, it must be
definitive of the
rights of the parties; and, third, it must have the
effect of disposing of at least a substantial portion of the relief
claimed
in the main proceedings’ (
Zweni
at 532I-533B). The respondents submitted that the order by the court
below was merely a procedural order, was not final, did not
grant
definite and distinct relief and did not dispose of a substantial
portion of the relief claimed in the contempt application.
[9] The judgment of the court
below did not dispose of any relief claimed in the contempt
application. Once the review application
has finally been determined
the appellants will be free to proceed with the contempt application.
But it did dispose of the relief
claimed in the application by the
respondents for the stay of the contempt application and it did so
finally. That the court below
intended the order staying the review
application to be final and not susceptible to amendment is apparent
from the order itself
and is confirmed by Joffe J in his judgment in
respect of the application for leave to appeal (see
SA
Eagle Versekeringsmaatskappy Bpk v Harford
[1992] ZASCA 42
;
1992 (2) SA 786
(A) at 792D-F).
[10]
In
Caroluskraal
Farms (Edms) Bpk v Eerste Nasionale Bank van Suider-Afrika Bpk; Red
Head Boer Goat (Edms) Bpk v Eerste Nasionale Bank
van Suider-Afrika
Bpk; Sleutelfontein (Edms) Bpk v Eerste Nasionale Bank van
Suider-Afrika Bpk
[1994] ZASCA 23
;
1994
(3) SA 407
(A) Eerste Nasionale Bank applied for the liquidation of
the appellants. The appellants filed certificates in terms of s 21 of
the Agricultural Credit Act 28 of 1966, contended that the
certificates constituted a bar to the liquidation proceedings and
applied
for the dismissal of the proceedings. Berman J dismissed the
application and on appeal the question arose whether Berman J’s
order was appealable. This court, per Hefer JA, held that if regard
was had to the relief claimed by the applicant for liquidation
the
order clearly did not qualify as a ‘judgment or order’ but that
seen from the viewpoint of the appellants the position
was different.
In effect they raised a special plea which if successful would have
had the effect that the liquidation applications
could not succeed
until such time as the certificates had lapsed. That special defence
had finally been determined by Berman J.
3
Hefer JA stated that the case was not distinguishable from cases such
as
Labuschagne v
Labuschagne; Labuschagne v Minister van Justisie
1967 (2) SA 575
(A),
Smit
v Oosthuizen
1979 (3)
SA 1079
(A) and
Constantia
Insurance Co Ltd v Nohamba
1986 (3) SA 27
(A) in which defences were raised by way of special
pleas. In
Labuschagne
Wessels JA said at 583D-F:
‘
Die verligting
wat eerste verweerder na aanleiding van die bewerings in sy spesiale
pleit aangevra het, is hom geweier. Indien die
verhoor voortgesit sou
gewees het sou die Hof nie bevoeg gewees het om weer opnuut die vraag
te oorweeg of die spesiale pleit gehandhaaf
behoort te word, al-dan
nie. By die verdere verhoor en die daaropvolgende uitspraak sou slegs
die geskilpunte betreffende die meriete
van eiser se eis ter sprake
gewees het. Die uitspraak waarteen eerste verweerder in hoër
beroep is, is dus, wat betref die
Hof wat die uitspraak gegee het, `n
finale en onherstelbare afhandeling van `n selfstandige en afdoende
verweer wat eerste verweerder
geopper het as grondslag vir die
regshulp wat hy in die spesiale pleit aangevra het.’
[11] Having considered these
cases and having compared what was said in
Labuschagne
with what was said in
Heyman
v Yorkshire Insurance Co Ltd
1964 (1) SA 487
(A) where this court held that the dismissal of an
alternative defence which had been heard separately was not
appealable, Hefer
JA said at 416C-D:
‘
Wanneer dit dan –
hetsy in `n aksie of in mosieverrigtinge – gaan om `n spesiale
verweer wat afsonderlik verhoor is, kom dit
my logies voor om te let
op die effek van die uitspraak op die regshulp wat deur die
verweerder
of
respondent
aangevra is. In wese is die Verhoorhof in so `n geval gemoeid met `n
versoek van die verweerder of respondent om die eis van die
hand te
wys op grond van `n verweer wat niks te make het met die meriete van
die saak nie. Dit is die regshulp wat op daardie
stadium ter sprake
is.’
He held that Berman J was
likewise only concerned with an issue specially raised by the
appellants, which issue had finally been
disposed of by Berman J and
that the order made by him was therefore an order which was
appealable.
4
[12] In
Durban’s
Water Wonderland (Pty) Ltd v Botha and Another
1999 (1) SA 982
(SCA) at 993B-D this court held that the dismissal of
a plea that a disclaimer notice at an amusement park exempted a
defendant
from liability in respect of any injury or damage arising
from the use of the amenities at the park constituted a final
judgment
within the meaning of s 83(b) of the Magistrates’
Court Act so as to render it appealable. It held that the dismissal
‘had
the effect of finally and irretrievably disposing of a
self-contained defence which existed independently of the
respondents’
case’ and that it was therefore appealable.
[13] Dealing with the
appealability of an order refusing an application for security Hefer
JA in
Shepstone &
Wylie and Others v Geyser NO
1998 (3) SA 1036
at 1042D-E quoted, with approval, the following
passage in
Ecker v Dean
1937 (SWA) 3 at 4:
‘
(t)he usual test,
ie whether the order finally disposes of portion of, or a certain
phase of, the issue between the parties does
not really fit
circumstances such as these, for the claim for security was a
separate and ancillary issue between the parties,
collateral to and
not directly affecting the main dispute between the litigants . . .
it is not a procedural step in attack or
defence at all but a measure
of oblique relief sought by one party against the other on grounds
foreign to the main issue, ie the
financial situation of one
litigant, this relief to be effective if at all only after judgment.
The order determining this collateral
dispute is therefore final and
definitive for at no later stage in the proceedings can the applicant
obtain the substance of what
has been refused to him. If he has been
prejudiced by the order his prejudice is irremediable.’
[14] In the present matter the
respondents claimed to be entitled to a stay of the contempt
application pending the determination
of the review application. They
were in effect claiming that they had a special defence to the action
albeit a temporary defence,
to the effect that the appellants were
not entitled to the relief claimed by them pending the review
application. For present purposes
there is no real distinction
between that defence and the special defence raised in
Carolus
.
It is true that in that case it was claimed that the application for
liquidation should be dismissed because of the existence
of the s 21
certificate but it would to my mind have made no difference to the
reasoning of Hefer JA had the plea been that
the application for
liquidation should be stayed for as long as the s 21 certificate
remained valid.
[15] The respondents submitted
that Joffe J did no more than to postpone the contempt application
and that an order postponing a
matter was not appealable.
5
I do not agree. An order postponing a matter is merely procedural in
nature and not an order in respect of a defence raised. As
in
Carolus
the defence raised by the respondents was a self-contained defence
which was raised independently of the appellants’ case and
as
stated above that defence was finally determined by the court below.
In so far as the other two attributes that an appealable
‘judgment
or order’, as a general principle should have, it should be borne
in mind that it is the application for a stay
of the contempt
application and not the contempt application itself which constitutes
the main proceedings. The question is whether
the order by the court
a quo is definitive of the rights of the parties in respect of the
application to stay the contempt proceedings
and whether it disposes
of at least a substantial portion of the relief claimed in that
application.
6
The answer to those two questions is clearly in the affirmative. It
follows that the order by the court below is appealable.
Did the court below have a
discretion to stay the contempt proceedings?
[16] As stated above Joffe J held
that he had a discretion to stay the contempt application if he
considered it to be in the interest
of justice to do so. In this
regard he relied on cases dealing with the stay of proceedings
pending the payment of costs incurred
in substantially similar
previous proceedings between substantially the same parties (see
Western Cape Housing
Development Board and Another v Parker and Another
2005 (1) SA 462
(C) at 465I-466C; and Herbstein and Van Winsen
The
Civil Practice of the Supreme Court of South Africa
4 ed (1997) p 254-261).
[17] It is clear that a court
does have the power to stay civil proceedings in certain
circumstances eg to prevent an abuse of the
process of the court (see
Corderoy v Union
Government (Minister of Finance)
1918 AD 512
at 517) and if an action is already pending between the
same parties on the same cause of action (see Herbstein and Van
Winsen
op cit
Chapter 10 p 245). However, Joffe J did not quote any authority
to the effect that a court has a general discretion to stay

proceedings whenever it considers it to be in the interests of
justice to do so.
[18] In
Abdulhay
M Mayet Group (Pty) Ltd v Renasa Insurance Co Ltd and Another
1999 (4) SA 1039
(T) at 1048H-I Van Dijkhorst J accepted that he had
a discretion to stay an application for an interdict restraining the
respondents
from infringing a registered trade mark pending an
application in terms of
s 14
of the
Trade Marks Act 194 of 1993
on the basis of honest concurrent use and/or other special
circumstances. He added that at best for the respondents it was a
discretion
that had to be exercised sparingly and in exceptional
circumstances. But Van Dijkhorst J apparently based his
acceptance of
a discretion to do so on the authority of
Fisheries
Development Corporation of SA Ltd v Jorgensen and Another; Fisheries
Development Corporation of SA Ltd v AWJ Investments
(Pty) Ltd and
Others
1979 (3) SA
1331
(W) at 1340D-1341A in which it was merely assumed that a court
had jurisdiction to stay civil proceedings on equitable grounds.
In
that case, dealing with a request that an action should be stayed in
the exercise of the court’s ‘inherent discretion to
avoid
injustice and inequity’ Nicholas J said at 1340B-D:
‘
The Courts do not
however act on abstract ideas of justice and equity. They must act on
principle. CF the
Western
Assurance Co
case
supra
at 275. And see the remarks of Innes CJ in
Kent
v Transvaalsche Bank
1907 TS 765
at 773-774:
“
(The appellant)
also asked us to stay the proceedings on equitable grounds, urging
that we had an equitable jurisdiction under the
insolvency law. The
Court has again and again had occasion to point out that it does not
administer a system of equity, as distinct
from a system of law.
Using the word ‘equity’ in its broad sense, we are always
desirous to administer equity; but we can only
do so in accordance
with the principles of the Roman-Dutch law. If we cannot do so in
accordance with those principles, we cannot
do so at all.”’
Nicholas J then proceeded to deal
with the application on the assumption that the court had the power
to grant a stay of the proceedings
on equitable grounds and concluded
that ‘even if it had the power to do so’ a case had not been made
out for such a stay.
7
[19] As I shall presently
indicate, I am of the view that if the court below did have a
discretion, on equitable grounds, to stay
the contempt application,
the exercise of that discretion in favour of the respondents was not
justified and should be set aside.
I shall, therefore, likewise
assume that the court below had such a discretion. I shall
furthermore assume in favour of the respondents
that the discretion
is a discretion in the strict or narrow sense ie a discretion with
which this court as a court of appeal can
interfere only if the court
below exercised its discretion capriciously or upon a wrong
principle, or has not brought its unbiased
judgment to bear on the
question or has not acted for substantial reasons or materially
misdirected itself.
8
Should the court a quo’s
order in the exercise of its discretion be interfered with on appeal?
[20] The court below held that
‘eise van geregtigheid’ indicated that the contempt application
should be stayed pending the
outcome of the review application
because if the contempt application ‘were to be determined prior to
the review application,
enforcement of a court order could be ordered
in circumstances where the enforcer of the court order was not
entitled to the court
order in the first instance’. The court
would, according to Joffe J, in the circumstances ‘knowingly
compound the problem’.
He added that the determination of the
review was important in so far as issues of mala fides and wilfulness
were concerned.
9
[21] However, the outcome of the
review application is irrelevant to the question whether the
respondents were acting in contempt
of court. In terms of the court
order Gap Distributors and Trust Electrical Wholesalers are
interdicted from infringing registered
design A96/0687. That court
order is a final order and has to be obeyed even if it is wrong as is
alleged by the respondents. Should
the review application be
successful and the registration of the design be set aside, the
interdict would come to an end as there
would no longer be a
registered design, but until that happens the interdict stands and
has to be obeyed. As was said by Herbstein
J in
Kotze
v Kotze
1953 (2) SA
184
(C) at 187F-G:
‘
The matter is one
of public policy which requires that there shall be obedience to
orders of Court and that people should not be
allowed to take the law
into their own hands.’
[22] In its judgment the court
below itself refers to
Culverwell
v Beira
1992 (4) SA
490
(W) at 494A-E where Goldstein J said that orders of court have to
be obeyed until set aside and that chaos may result if people
were
allowed to defy court orders with impunity.
10
It also refers to the judgment of Froneman J in
Bezuidenhout
v Patensie Sitrus Beherend Bpk
2001 (2) SA 224
(E) at 228F-230A where, relying on
Culverwell
and
Kotze
,
Froneman J said that an order of a court of law stands and must be
obeyed until set aside by a court of competent jurisdiction.
11
Having done so with apparent approval and having stated that it is
obliged to apply the judgment of this court, it is inexplicable
how
it could then, on the basis that the judgment could be wrong, have
considered the outcome of the review application to be of
any
relevance to the contempt application.
[23] For these reasons I am
satisfied that the court below misdirected itself and did not act for
substantial reasons. The following
order is therefore made:
1 The appeal succeeds with costs
including the costs of two counsel.
2 The order of the court below is
set aside and replaced with the following order:
‘
The application for a stay of
the proceedings pending the determination of the review application
in case no 19081/08 in the High
Court, Pretoria is dismissed with
costs.’
___________________________
P E STREICHER
ACTING DEPUTY PRESIDENT
APPEARANCES:
For appellant: L Bowman SC
B du Plessis
Instructed by:
Spoor & Fisher, Centurion
Matsepes, Bloemfontein
For respondent: M M Jansen SC
Instructed by:
Adams & Adams, Johannesburg
Honey Attorneys, Bloemfontein
1
Clipsal Australia Pty Ltd and Others v Gap Distributors (Pty) Ltd
and Others
2009 (3) SA 305
(W).
2
Clipsal Australia (Pty) Ltd and Another v Trust Electrical
Wholesalers and Another
2009 (3) SA 292
(SCA).
3
At 414H-415B.
4
At 416D-F.
5
Union Government (Minister of the Interior) and Registrar of
Asiatics v Naidoo
1916 AD 50
; and
Zweni
at 535F-H.
6
Bookworks (Pty) Ltd v Greater Johannesburg
Transitional Metropolitan Council and Another
1999 (4) SA 799
(W) at 804C-E.
7
At 1341A.
8
Malan and Another v Law Society, Northern Provinces
[2008] ZASCA 90
;
2009 (1)
SA 216
(SCA) para 13.
9
At paras[25] and [26].
10
At 312A-B para [21].
11
At para [21].