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[2017] ZASCA 134
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Cipla Agrimed (Pty) Ltd v Merck Sharp Dohme Corporation and Others (972/2016) [2017] ZASCA 134; [2017] 4 All SA 605 (SCA); 2018 (6) SA 440 (SCA); 2017 BIP 14 (SCA) (29 September 2017)
Links to summary
THE SUPREME
COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case
No: 972/2016
In the matter between:
CIPLA AGRIMED
(PTY) LTD
APPELLANT
and
MERCK SHARP DOHME
CORPORATION
1
ST
RESPONDENT
MERIAL LIMITED (MERIAL
LLC)
2
ND
RESPONDENT
MERIAL SOUTH AFRICA
(PTY) LTD
3
RD
RESPONDENT
Neutral citation:
Cipla Agrimed v Merck Sharp Dohme Corporation
(972/16)
[2017] ZASCA 134
(29 September 2017)
Coram:
Ponnan, Cachalia and Mathopo JJA and Gorven and Rogers
AJJA
Heard
:
17 August 2017
Delivered:
29 September 2017
Summary: Delict:
Interlocutory interdict: whether appealable: whether
final in effect: contention that patent would have run its course
prior to
finalisation of action for final interdict: restatement of
test for appealability: order must be definitive of an issue and not
susceptible of alteration by court of first instance: interdict
interim in form and effect: not appealable.
ORDER
On appeal from:
The
Court of the Commissioner of Patents (Louw J sitting as court of
first instance).
The
appeal is struck from the roll with costs including the costs of two
counsel.
JUDGMENT
Rogers AJA
[1]
The
appellant (Cipla) is the proprietor of South African Patent 92/7457
(the 1992 patent). The first and second respondents are
the joint
proprietors of South African Patent 98/10975 (the 1998 patent). The
third respondent is a registered licensee of the
1998 patent. The
first and second respondents were the cited patentees in an
application brought by Cipla for the revocation of
the 1998 patent
(the revocation application). All three respondents are the
plaintiffs in a pending action against Cipla in which
they claim a
final interdict against infringement and an enquiry into damages or a
reasonable royalty (the infringement action).
For convenience I refer
to the respondents collectively as Merck.
[2]
The
revocation application and infringement action were brought in the
Court of the Commissioner of Patents (the CCP). In circumstances
I
shall presently explain, Merck in January 2016 launched an urgent
application in the CCP for an interdict restraining Cipla from
infringing certain claims in the 1998 patent pending the final
determination of the infringement action. Cipla opposed the urgent
application. On 4 March 2016 Louw J granted the interim interdict,
adding the proviso that the interdict would lapse on the expiry
date
of the 1998 patent if the action was not finally determined by that
date. The expiry date of the 1998 patent is 3 December
2018. He
reserved costs for determination in the infringement action. He gave
Cipla leave to appeal to this court against the whole
of his order.
[3]
The
1992 and 1998 patents concern injectable veterinary formulas. It is
unnecessary to go into the technical details. They are set
out in
this court’s judgment in earlier litigation between the same
parties:
[2015] ZASCA 175
;
2016 (3) SA 22
(SCA) (the SCA judgment).
[4]
Cipla instituted the revocation application in
June 2011. Cipla advanced two grounds for revocation of the 1998
patent, based on
s 61(1)(c) of the Patents Act 57 of 1978 (the
Patents Act) read
with
s 25(1)
, namely: (i) that the patent was
not a ‘new invention’ as contemplated in
s 25(1)
;
(ii) that to the extent it was a new invention, it did not
involve an ‘inventive step’ as contemplated in
s 25(1).
Cipla stated that in regard to both grounds it would rely on the 1992
patent. The first of these grounds in essence asserted that
the
claims in the 1998 patent were anticipated by the 1992 patent. I
thus refer to this ground as the anticipation point.
In keeping with
the terminology used by the parties, I refer to the second ground as
the obviousness point.
[5]
In
October 2011 Merck issued summons in the infringement action. The
substantive relief it sought was (i) an interdict against
infringement and (ii) an enquiry into damages as a consequence
of the infringement, alternatively an enquiry into a reasonable
royalty. In its plea Cipla denied that the 1998 patent was valid,
alleging that the patent was liable to be revoked on the same
grounds
set out in the revocation application. Cipla did not deny that its
product infringed Merck’s patent if the impugned
claims in
Merck’s patent were valid.
[6]
In
April 2012 Cipla delivered an application for the referral of the
revocation application to oral evidence. In May 2012 the parties
agreed to stay the infringement action pending the final
determination of the revocation application. In August 2012 Cipla’s
attorneys wrote to Merck’s attorneys, expressing the view that
oral evidence was needed on the obviousness point but not
on the
anticipation point. They proposed that the revocation application and
the application for referral to oral evidence be set
down for hearing
on the same date. Merck’s attorneys’ reply was that Merck
did not agree to a piecemeal hearing and
that Merck would deal with
any conditional application for a referral to oral evidence if and
when it was made.
[7]
The
revocation application was heard by Teffo J on 13 March 2013. In the
introductory section of their heads of argument in the
CCP Cipla’s
counsel sketched various permutations in which Cipla might ask for
the matter to be referred to oral evidence
on the obviousness point.
They concluded this section with the statement that ‘[t]he
present hearing, however, is confined
to the issue of anticipation
only and no oral evidence is required to decide this question’.
[8]
Merck’s counsel, who filed their heads of
argument several weeks later, stated that Cipla had chosen to limit
their argument
to the anticipation point and did not persist with the
obviousness point. With reference to oral evidence, they submitted
that
there was no need to have regard to a referral application which
might or might not be made in the future. They noted, however,
that
the procedure proposed by Cipla was incompetent and that Cipla’s
failure to advance argument on the obviousness point
amounted to an
abandonment thereof and that any attempt later to resurrect it would
be opposed on the basis of res judicata.
[9]
Teffo J delivered judgment on 11 March 2014. She
upheld the anticipation point and granted revocation. An appeal
against her decision
was heard in this court in November 2015. In
their heads Merck’s counsel said that Cipla had not persisted
with the obviousness
point in the CCP. In a related footnote Merck’s
counsel said that although Cipla’s heads in the CCP had
contained a
suggestion that Cipla might apply for a referral to oral
evidence depending on future events, such an application would have
been
incompetent as violating the principle of res judicata. The
footnote ended thus:
‘The threatened application for
referral is, however, not a matter which is in issue in this appeal,
which is limited to the
finding of the court a quo that the patent is
invalid on the ground of lack of novelty [viz the anticipation
point].’
[10]
In
their heads of argument Cipla’s counsel noted that, in addition
to the anticipation point, certain of the patent’s
claims were
challenged on grounds of obviousness. However nothing more on the
subject was said. Merck’s heads, in the respects
I have
mentioned, were not addressed.
[11]
This court delivered judgment on 27 November
2015. The court found that the anticipation point was bad. The
following order was
made:
‘1. The appeal is upheld with
costs, including the costs of two counsel.
2. The order of the court
below is replaced with the following:
(a) The application for revocation of
[the 1998 patent] is dismissed.
(b) Each of the claims of [the 1998
patent] is certified as being valid in terms of section 74 of the
Patents Act No 57 of 1978.
(c) Costs are awarded to the joint
patentees, including the costs of two counsel.’
[12]
Para 2 of this order followed exactly the relief
sought by Merck in its counter-statement in the revocation
application and in the
concluding paragraph of Merck’s
counsel’s heads of argument in the CCP and in this court.
[13]
On
3 December 2015 Merck’s attorneys wrote to Cipla’s
attorneys stating that the SCA judgment addressed the only matter
in
issue in the infringement action. Since it was common cause that if
the 1998 patent was valid Cipla was infringing it, they
demanded that
Cipla consent to the relief claimed in the infringement action,
failing which Merck would set the matter down for
trial, apply for an
interim interdict and seek a punitive costs order.
[14]
On
17 December 2015 Cipla served a notice to amend its plea by deleting
the anticipation point and adding a new attack on the patent’s
validity, namely that the invention illustrated or exemplified in the
specification ‘cannot be performed or does not lead
to results
and advantages set out in the complete specification’. In
keeping with the parties’ terminology, I refer
to this as the
inutility point, which is based on s 61(1)(d) of the Act. This
notice of amendment signalled Cipla’s
intention to persist with
its attack on the validity of the 1998 patent, relying on the
(existing) obviousness point and the (new)
inutility point. Merck
responded on 12 January 2016 by serving a notice to amend its
replication by setting up the SCA judgment
as rendering the validity
of the 1998 patent res judicata. Following reciprocal objections,
substantive applications for amendment
which were delivered. The
exchange of affidavits in the amendment applications was completed by
22 April 2016.
[15]
In
the meanwhile, and on 14 January 2016, Merck launched an urgent
application for an interdict pending the final determination
of the
infringement action. The matter served before Louw J who delivered
judgment on 4 March 2016. In summary he found that although
only the
anticipation point had been argued in the CCP and in this court,
Cipla had been obliged to put forward, in the revocation
application,
all its attacks on the validity of the 1998 patent. In regard to the
obviousness point, Cipla should have sought a
separation of issues if
it wanted that point to stand over for later decision. The validity
of the patent was thus res judicata.
Because in his view Merck had a
clear right, it did not need to establish a reasonable apprehension
of irreparable harm. He considered
that the balance of convenience
favoured Merck. To offset possible prejudice to Cipla, Merck had
tendered to pay any damages Cipla
might suffer if it transpired that
the interim interdict should not have been granted.
[16]
In
what follows I refer to the basis on which the court a quo found
Merck to be entitled to an interdict as res judicata even though
there might be a difference in the principles applicable to the
obviousness point and the inutility point respectively, given that
the former but not the latter formed part of the pleadings when the
SCA judgment was delivered.
[17]
There is a threshold, and ultimately decisive,
question as to whether the court a quo’s judgment is
appealable. Merck’s
counsel contended that it was not. This
point was taken when the application for leave to appeal was heard.
Louw J evidently did
not agree with it because he granted leave.
Unfortunately he did so without giving reasons. The fact that he
granted leave to appeal
does not dispose of the question of
appealability.
[1]
[18]
In
terms of
s 19(2)
of the
Patents Act a
decision or order of the
CCP has the same effect and shall for all purposes be deemed to be a
decision or order of the North Gauteng
High Court, Pretoria.
[2]
The appealability of CCP decisions thus stands on the same footing as
decisions of the high court. In terms of
s 16(1)
of the
Superior
Courts Act 10 of 2013
an appeal may, with leave granted, be brought
against ‘any decision’ of a high court. The word
‘decision’
here has the same meaning as it was held to
have in
s 21(1)
of the repealed Supreme Court Act 59 of 1959 and
‘decision’ in the latter section in turn had the same
meaning as ‘judgment
or order’ in s 20(1) of the
repealed Act.
[3]
Generally a ruling does not constitute a ‘decision’
unless it has three attributes: it must be final in effect; it
must
be definitive of the rights of the parties; and it must have the
effect of disposing of at least a substantial part of the
relief
claimed.
[4]
[19]
An
interim interdict pending the determination of an action is not final
in effect, which is why matters decided for purposes of
granting an
interim interdict do not become res judicata.
[5]
The grant of an interim interdict is thus not usually appealable.
[6]
In
JR 209 Investments (Pty) Ltd & another
v Pine Villa Country Estate (Pty) Ltd
[7]
this court pointed out that in deciding whether an order is final one
must bear in mind not merely the form of the order but also,
and
predominantly, its effect.
[8]
In that case the interim interdict was held to be appealable because
it affected the whole of a township development whereas the
pending
action concerned only a part of the development. The right to develop
the whole township was not an issue which would be
decided in the
pending action. The interdict was thus final in effect.
[20]
The court a quo did not intend to decide the res
judicata point finally. True, Louw J was sufficiently clear in his
own mind to
regard Merck as having established a clear right. This
led him to conclude that Merck did not need to establish irreparable
harm.
Louw J nevertheless addressed the balance of convenience and
found that it favoured Merck. The form of order was an interim
interdict
pending the final determination of the action. If Louw J
had intended finally to decide the res judicata point, nothing would
have
remained in dispute in the pending action insofar as
interdictory relief was concerned. He thus must have envisaged that
the res
judicata point, and therefore the award of a permanent
interdict, would be finally decided in the action.
[21]
The appellant’s counsel submitted that the
interdict was final in effect because the action was unlikely to be
determined
before the expiry of the patent on 3 December 2018. Since
the final interdict claimed in the infringement action could itself
not
endure beyond 3 December 2018, the interim order, so it was said,
in effect finally disposed of interdictory relief. In support
of this
contention Cipla’s counsel cited
BHT
Water Treatment (Pty) Ltd v Leslie & another.
[9]
There the applicant sought to enforce a 12-month restraint of trade.
Marais J said that although the applicant sought an interim
interdict
the interdict was in substance final because the action would not be
determined within the 12-month period. (The report
does not state
when the application was argued but by the time judgment was
delivered the restraint had about eight months to run.)
Marais J thus
considered that he should apply the test for final interdicts,
including the approach to disputes of fact.
[10]
This approach has been followed in a number of provincial
decisions.
[11]
And in
Reddy v Siemens Telecommunications
(Pty) Ltd
,
[12]
also a 12-month restraint case, this court said that the lower court
had been correct to treat the matter as being substantially
an
application for final relief, referring with approval to
BHT.
[22]
On
the other hand in
Radio Islam v Chairperson,
Council of the Independent Broadcasting Authority, & another
[13]
Goldstein J declined to follow
BHT
in
this respect, finding that it was clearly wrong.
[14]
Radio Islam
also has
its supporters at provincial level.
[15]
And in the sphere of patents, it was followed by Botha J in
Pfizer
Ltd & another v Cipla
Medpro
(Pty) Ltd & others.
[16]
As Goldstein J observed in
Radio
Islam
, an interim interdict is always final
in the limited sense that ‘time run cannot be recalled’
(see this court’s
decision in
Cronshaw &
another v Fidelity Guards Holdings (Pty) Ltd
[17]
).
Prejudice of that kind is taken into account in judging the balance
of convenience.
[18]
The court can require an applicant, as a condition for the grant of
an interim interdict, to give an undertaking to pay damages
if it is
ultimately found that an interim interdict should not have been
granted.
[19]
In
Cronshaw
an
employee was interdicted from breaching a restraint of trade pending
the determination of an action. The appeal record shows
that the
restraint operated for a period of two years from 1 March 1994 and
that the interim interdict was granted on 11 May 1994.
The appeal was
heard in this court on 19 March 1996 by which time the two-year
restraint had expired. The fact that a substantial
part of the
restraint period may have expired before the matter came to trial was
clearly not thought to affect the appealability
of the interim
interdict.
[23]
BHT
and the cases
which followed it were concerned with the test to be applied in the
granting of an interdict rather than the issue
of appealability but I
can see force in the argument that if a court grants an interim
interdict in circumstances where it should,
on the basis of
BHT
,
have treated the application as one for final relief, the interdict,
though interim in form, is final for purposes of appealability.
This
is particularly so where, as here, Cipla pertinently alleged in the
court a quo, and subsequently argued, that the matter
should, in
accordance with
BHT
,
be adjudicated as a claim for a final interdict and where the court a
quo’s failure to do so is one of the grounds of appeal.
[24]
Although
Reddy
[20]
approved
BHT
, the
point was not argued. (The appellant there relied on
BHT
to justify the trial court’s treatment
of the application as being in substance for a final interdict and
the respondent did
not take issue with the contention.) Since the
correctness of the competing lines of authority was likewise not
canvassed in argument
before us, I shall assume, without so deciding,
that the
BHT
approach
is sound in principle. On that assumption, there are two points to be
made. Firstly, the
BHT
approach
should be confined to cases where it is clear, at the time the court
grants the interdict, that the matter will not be
able to be finally
determined before the interdict in any event expires.
BHT
and
Reddy
were
cases of that kind. The trial court cannot be expected to engage in
speculative crystal ball-gazing. Second, the
BHT
approach is concerned with whether the trial
court will have opportunity to decide the case finally, given the
limited duration
of the legal restraint. The fact that an appeal from
the trial court’s final decision could not be finalised before
the expiry
of the legal restraint is, as
Cronshaw
shows,
irrelevant. An interdict, interim in
form, could only be regarded as a final order of the trial court if
the trial court would
not have the opportunity, before the expiry of
the legal restraint, of deciding the matter on a final basis.
[25]
Merck has never contended that it is entitled to
an interim interdict on the merits of the case, ie after an
assessment on paper
of the relative strengths and weaknesses of the
obviousness and inutility points. It launched its application for an
interim interdict
on the sole basis that the SCA judgment had
rendered the validity of its patent res judicata. Since infringement
was not in issue,
Merck’s entitlement to the interdict depended
on whether it had a clear or prima facie right flowing from the res
judicata
issue. Louw J formed a view on that question in Merck’s
favour. If, contrary to Louw J’s conclusion, the res judicata
point were finally determined by the CCP in Cipla’s favour, the
interim interdict would have to be discharged owing to changed
circumstances. The interim interdict has no other foundation. The
discharge of the interim interdict would not be a lengthy process
since there would be no basis for opposing it.
[26]
The correct question, therefore, is whether as at
4 March 2016 it was clear that a final decision on the res judicata
point would
not be obtained in the CCP in time to obtain the
discharge of the interim interdict before 3 December 2018. The fact
that such
a final decision might itself be taken on appeal would, as
I have said, not affect the present enquiry. Once the correct
question
is asked, the answer is plain. It was not clear as at 4
March 2016 that Cipla would be unable to obtain a final decision from
the
CCP on the res judicata point, and thus a discharge of the
interim interdict (if the final decision were in its favour), prior
to 3 December 2018. On the contrary the probabilities are that a
final decision could have been achieved well before 3 December
2018.
Completing the exchange of affidavits in the amendment applications
would not have taken more than a month or two. The refusal
of either
of the amendment applications would have been a final and appealable
order.
[21]
If for any reason the decision on the amendment applications did not
finally determine the res judicata point, that point together
with
the confirmation or discharge of the interim interdict, could have
been expeditiously decided as a separated issue.
[22]
A decision thereon would have been a final and appealable order.
[23]
All of this should have been achievable by the end of 2016 and at any
rate well before 3 December 2018.
[27]
It
follows that the interdict granted by the court a quo was not only
interim in form but interim in substance. On ordinary principles
it
is not appealable. As pointed out in
Western
Areas
,
[24]
s 39(2) of the Constitution, which requires legislation to be
interpreted in a way which promotes the spirit, purpose and
objects
of the Bill of Rights, entitles a court to have regard to the
interests of justice in assessing whether there should be
a
relaxation of the usual requirements.
[25]
However Cipla did not advance any arguments, other than those I have
already addressed, in support of a contention that it would
be in the
interests of justice in the present case to depart from the usual
requirements and I do not think that any such departure
is warranted.
[28]
I
have had the benefit of reading my colleague Gorven AJA’s
judgment in draft. It seems that we are agreed on the result and
on
all the applicable principles save for the basis on which
BHT
is to be distinguished (neither of us
consider it appropriate to determine, in the present appeal, whether
BHT
is right in
principle). My colleague distinguishes
BHT
in paras 51 and 52 below. He considers the crucial difference to be
that whereas in
BHT
the
trial court dealt with the matter as a final interdict, the court a
quo in the present case dealt with the matter as an interim
interdict, an approach which my colleague considers was not attacked
before us. However, and contrary to what my colleague says,
Cipla
squarely attacked the court a quo’s approach, both in its
application for leave to appeal and in its heads of argument.
In the
application for leave to appeal Cipla stated inter alia that the
court a quo had erred in finding that the interdict sought
was an
interim interdict and in finding that Merck had satisfied the
requirements for the granting of an interim interdict when
what was
required was a finding that Merck had satisfied the requirements for
a final interdict. In their heads of argument in
this court Cipla’s
counsel submitted that Merck’s characterisation of its
application as one for an interim interdict
was inaccurate, having
regard to the principles laid down in
BHT
;
that in substance a final interdict had been sought; and that the
court a quo should thus have applied the requirements for a
final
interdict
.
Naturally
Cipla did not go the further step of saying that the court a quo
erred in failing to grant a final interdict – Cipla’s
argument on the merits was that no interdict at all should have been
granted. However the ineluctable conclusion from Cipla’s
arguments is that the court a quo mischaracterised its order and
should have granted an order which reflected its true substance
(ie a
final interdict) if satisfied that Merck had met the requirements for
a final interdict.
[29]
To
the extent that my colleague’s distinction rests solely on the
fact that, unlike the present case, the court in
BHT
dealt with the matter as a final interdict,
this is in my view an unsound basis for distinguishing the cases. The
trial court cannot
be the final arbiter of whether its order is final
in effect and substance. If it were otherwise, a trial court’s
granting
of leave to appeal would be dispositive, which clearly it is
not. This court has said on multiple occasions that in determining
whether an order is interim or final (and thus appealable) it is not
the form but predominantly the effect of the order which is
important. The significance of
BHT
is that it lays down a test for determining when an interdict,
despite its interim form, is final in effect. It is irrelevant for
present purposes that the application of the test led Marais J to
conclude that the interdict he was dealing with was final in
effect.
Cipla relied on
BHT
for
the legal test, not its fact-specific outcome
.
The legal test, according to
BHT
(as
apparently confirmed in
Reddy
),
is that an interdict is final in effect if the trial court will not
have another opportunity to make a final determination before
the
restraint (or here, the patent) expires. If that legal test is right
(or assumed, without so deciding, to be right), there
is no avoiding
an enquiry into whether, in the present case, the CCP would have had
an opportunity to make a final determination
before 3 December 2018.
[30]
BHT
by its nature
calls for a predictive evaluation but the speculative element would
be kept to a minimum if, as I propose, the
BHT
approach is confined to cases where it is quite clear that trial
court will not have an opportunity of finally adjudicating the
interdict before it lapses. The answer is the present case is
uncomplicated – the
BHT
test,
as applied to the facts of this case, leads to the conclusion that
the CCP’s order was not only interim in form but
interim in
substance.
[31]
I
respectfully consider that my colleague also incorrectly states
Cipla’s argument when he says (para 47) that Cipla is asking
us
to entertain the appeal on the same basis that was rejected in
Cronshaw
. In
Cronshaw
it was not alleged that the trial court would
be unable to finally adjudicate the interdict before the restraint
expired. No such
argument is reflected in the heads of argument or in
this court’s judgment. This is unremarkable because in
Cronshaw
the restraint still had slightly more than 21 months to run from the
date of the granting of the interim interdict. The argument
in
Cronshaw
was that the
interim interdict was final in effect because its operation during a
part (but not the whole) of the restraint period
could not be undone.
That argument was rejected and Cipla has not sought to revive it.
According to
BHT
the
position is different where the interdict, though interim in form,
will remain in operation for the whole period of the restraint.
Whether that is a justifiable distinction must be left for another
day. I should add that
BHT
was
referred to in argument in
Cronshaw
not
by the appellant in relation to appealability but by the respondent
in relation to the merits of the enforceability of the restraint.
BHT
was not mentioned in the judgment (which dealt only with
appealability).
[32]
The appeal must thus be struck from the roll with
costs, including the cost of two counsel. In Merck’s heads of
argument we
were asked to grant Merck costs on the attorney client
scale both in the court a quo and in this court. The respondents’
counsel conceded at the hearing that in the absence of a cross-appeal
he could not seek a variation of the CCP’s cost order.
The
respondents’ counsel also acknowledged that Cipla’s
conduct of the appeal was not worthy of censure.
[33]
Accordingly the following order is made: The
appeal is struck from the roll with costs including the costs of two
counsel.
__________________
O L Rogers
Acting Judge of Appeal
Gorven AJA (Ponnan,
Cachalia and Mathopo JJA concurring):
[34]
I
have had the benefit of reading the closely reasoned and thorough
judgment of Rogers AJA. I agree with the outcome and order.
My
concern is that it ventures into territory which was not fully
canvassed in argument and which is not necessary to decide the
matter
before us.
[35]
The factual background is clearly sketched in
that judgment and I will not repeat it. The crisp issue is whether or
not the order
granted by Louw J is appealable. His order reads as
follows:
‘In the result, I find that the
applicants have satisfied the requirements for the granting of an
interim interdict. I accordingly
make the following order:
[a] The respondent is interdicted from
infringing claims 1 to 7, 18 to 23 and 29 of South African patent
98/10975 pending the final
determination of the action instituted by
the applicants against the respondent on 18 October 2011 under the
above case number,
provided that the interdict will lapse on the
expiry date of the patent if the action has not been finally
determined by that date.
[b] The costs of the application are
reserved for determination in the action.’
[36]
The appellant (Cipla) accepts that the order is
in the form of an interlocutory interdict which operates pending the
outcome of
the action mentioned in the order itself. It also accepts
that this court has held that, ordinarily, such interdicts are not
appealable.
[26]
However, it submits that the
interdict
in question, while interim in form, is final in effect. It was on
this sole basis that Cipla relied for its submission
that the present
order was appealable. No further grounds were relied upon.
[37]
It
is worth briefly sketching the general approach to appealability.
Section 20(1) of the
Supreme Court Act
[27]
provided that an appeal lay from a ‘judgment or order’.
[28]
These words were interpreted in
Zweni
v Minister of Law and Order
:
[29]
‘
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’.
This
court has held that those three requirements do not constitute a
closed list. This was made plain by the use of the words
‘as
a general principle’. In addition, the interests of justice are
of paramount importance. However, since Cipla
relies solely on
what is meant by ‘final in effect’ in submitting that the
order in question is appealable, the enquiry
need only be confined to
this.
[38]
The appealability of
interlocutory orders has been considered over time. One of the
earliest matters dealing with this is
Prentice
v Smith
,
[30]
where the court held that an order which grants an interim interdict
‘is an interlocutory order, and that consequently there
can be
no appeal.’ The earliest statement of the test in this court
was that of Innes J in
Steytler
NO v Fitzgerald
:
[31]
‘
It is
sufficient for the purposes of this case to say that when an order
incidentally given during the progress of litigation has
a direct
effect upon the final issue, when it disposes of a definite portion
of the suit, then it causes prejudice which cannot
be repaired at the
final stage, and in essence it is final, though in form it may be
interlocutory.’
In that
matter, a special plea was raised as to jurisdiction and was
dismissed. This court held that, although made in the course
of the
action between the parties, it disposed of a definite portion of the
suit and was, accordingly, in essence final and thus
appealable. This
was an early, clear, statement of what is meant by ‘final in
effect’ or ‘in essence . . . final’.
In
Blaauwbosch
Diamonds Ltd v Union Government (Minister of Finance)
,
[32]
Innes CJ restated and clarified what he said in
Steytler
:
‘
It was then
laid down that a convenient test was to inquire whether the final
word in the suit had been spoken on the point; or,
as put in another
way, whether the order made was reparable at the final stage.’
[39]
In
Globe and Phoenix Gold
Mining Company Ltd v Rhodesian Corporation Ltd
,
[33]
the respondent had sued the appellant on the basis that it was
entitled to a half share in any minerals found in certain mining
claims. It requested the appellant to allow it to inspect the mine
which request was refused. After the pleadings in the action
had
closed, the respondent sought an order allowing it to inspect the
mine. The order was granted. The appellant contended that
the order
was appealable. This court disagreed, citing the test in
Steytler
and further explaining the approach to appealability:
‘
The order does
not irreparably anticipate or preclude in whole or in part the relief
sought in the main action or suit. It does
not dispose of any issue
or any portion of the issue in the main suit, and the execution of
the order will not cause irreparable
prejudice at the later stage in
the sense that it will cause prejudice to the respondent when the
final judgment is given. We have
not to look to any inconvenience or
even expense which an interim order may cause to the person against
whom such order operates.
We must look to its effect upon the issue
or issues in the suit. An interlocutory order may of course cause
some degree of prejudice
– using this word in its widest sense
– to the person required to carry it out, but . . . [this] does
not constitute
that “irreparable prejudice” which would
give to an interlocutory order the effect of a final judgment.’
[34]
[40]
Here the issue of prejudice
was raised. It is clear from the above, that the only prejudice which
may make an order appealable is
prejudice which in some way affects
the final determination of an issue in the suit or stands in the way
of an issue being determined
at a later date. This is what the cases
have consistently meant when using the words ‘final in effect’.
[41]
In
African Wanderers
,
an interim interdict had been granted. A submission was made that,
because irreparable harm could be caused to the appellant,
the order
did not merely preserve the status quo but was in effect a final
judgment. This court applied the approach of
Globe
and Phoenix
saying:
‘
The fact that
the order made by HOWARD, J., could well prove to be prejudicial to
the company does not therefore justify a contention
that the order
was a final and definitive order and not merely an order
ad
servandam causam
.’
[35]
[42]
In
Cronshaw &
another v Coin Security Group (Pty) Ltd
,
[36]
it was again contended that prejudice rendered an interlocutory
interdict appealable.
Cronshaw
concerned an interim interdict in support of a two-year restraint of
trade. By the time the matter was heard by this court, the
restraint
period had expired. The prejudice raised was that the final
determination would not be made before the restraint expired.
It was
submitted that what was in form interlocutory, was in effect final
since the interdict had operated during the entire restraint
period.
In striking the matter from the roll, Schutz JA drew on
African
Wanderers
:
‘
This argument
also was rejected, it being held on the authorities that it is not
every kind of prejudice that is relevant, only
that which directly
affects the issue of the ultimate suit.’
[37]
[43]
One example of an interim
interdict being final in effect is found in
JR
209 Investments (Pty) Ltd & another v Pine Villa Country Estate
(Pty) Ltd; Pine Villa Country Estate (Pty) Ltd v JR 209 Investments
(Pty) Ltd
.
[38]
There, the seller of a single lot in
a township development brought an action for retransfer from the
purchaser. The seller applied
for an interdict preventing the
purchaser from dealing with the property pending the outcome of the
action. An interim interdict
was granted. The interdict prevented the
developer of the township from dealing with the whole township
pending the outcome of
the action. This court held:
‘
The
order affected the entire development, yet the dispute between
the parties related to Portion 7 only. The order was overbroad.
The
right to develop the township as a whole is not an issue that would
be decided by the trial court and it was consequently final
in effect
even if only for a limited period. In our view the
merx
could have been preserved without the necessity for an order in those
terms. It follows therefore that the order of Rabie J was
appealable.’
[39]
[44]
It
was explained in
Cronshaw
that drawing the line between decisions which are ‘interlocutory’
and those which are ‘final’ and therefore
appealable, ‘is
intrinsically difficult, and a decision one way or the other may
produce some unsatisfactory results.’
Schutz JA recognised
that, ultimately, this is a matter of policy. He concluded that:
‘
From a
practical point of view it seems preferable that the merits of the
interdict be left for final determination of the trial,
and that the
interim relief, to which the balance of convenience is relevant, be
considered once only.
The net effect of a
contrary rule, allowing an appeal against the grant of interim
orders, could be the undermining of a necessarily
imperfect
procedure, which is nonetheless usually best designed to achieve
justice.’
[40]
Van
Heerden JA also recognised that this was a matter of policy.
[41]
[45]
The need to develop a policy
position arises from the nature of interim interdicts. They are
temporary measures designed to protect
rights before a final
determination can be made. Since most of these are granted by way of
application, it is not ordinarily possible
to resolve competing
contentions. Thus ‘a necessarily imperfect procedure’
developed. This requires the establishment
of a
prima
facie
right,
although open to some doubt, as opposed to a clear right. It also
attempts to factor in the likely resultant prejudice in
assessing the
balance of convenience. The stronger the prospects of ultimate
success, the less the balance of convenience counts.
[42]
It also allows for a reconsideration of the interdict if
circumstances warrant it.
[43]
As soon as the court makes a final determination, the interim
interdict is discharged. This is also why a fresh application for
an
interim interdict pending an appeal can ordinarily be brought. In
Knox D’Arcy
Ltd & others v Jamieson & others
,
EM Grosskopf JA referred to the practical difficulty raised in
Cronshaw
‘that an appeal against the grant of an interim interdict would
often be inconsistent with the very purpose of this remedy.’
[44]
[46]
Prejudice which does not
affect the issues in the suit is dealt with under the rubric of the
balance of convenience in an application
for an interim interdict.
Cronshaw
referred to a court’s discretion to impose reasonable
conditions such as an undertaking to be liable in damages if it
emerges
that the interdict should not have been granted.
[45]
[47]
Cipla seized on the phrase
‘final in effect’ in the present matter. It argued that
the patent will have run its course
by the time the main action comes
to be considered.
[46]
This is precisely the argument raised and rejected in
Cronshaw
.
It boils down to the argument that Cipla is prejudiced because ‘time
run cannot be recalled’.
[47]
However, it has been consistently held that ‘final in effect’
means that an issue in the suit has been affected by
the order such
that the issue cannot be revisited either by the court of first
instance or that hearing the action. The kind of
prejudice relied on
by Cipla was decisively rejected as a basis for appealability as far
back as
Globe and
Phoenix
. I know of
no case where it has rendered a matter appealable.
[48]
As
Rogers AJA says, Louw J did not finally decide the
res
judicata
issue. Nor
was it submitted that he did so. There is nothing to prevent his
reconsideration of the order he granted on the basis
of changed
circumstances, including a finding on this point in the further
interlocutory procedures pending in the action. Nor
is the court
which will deal with the amendment applications, or the court which
will hear the action, precluded or hampered by
the interim interdict
from deciding this issue. The order is thus not final in effect
within the meaning of those words in our
law.
[49]
I
can find nothing to distinguish the present matter from
Cronshaw
.
The respondent (collectively Merck) approached Louw J as a matter of
urgency for an interim interdict. This relief was sought
pending an
action which would finally determine the issues between the parties.
The papers of Merck addressed the requirements
for an interim
interdict. Likewise, Louw J made it clear that he intended to go no
further than to grant an interim interdict,
saying ‘
I
find that the applicants have satisfied the requirements for the
granting of an interim interdict.’
He
considered the balance of convenience, a factor relevant only to an
interim interdict. Included in this consideration was the
tender by
Merck to pay any damages which Cipla was able to show it had suffered
as a result of the grant of an interim interdict.
This latter
consideration takes into account the court’s ability to impose
reasonable conditions along the lines mentioned
in
Cronshaw
so as to limit prejudice.
[48]
[50]
On
the established principles in our law, the order granted was thus
both in form and effect an interlocutory interdict and not
appealable.
In so finding, I recognise
that the demarcation between interlocutory and final decisions ‘is
intrinsically difficult, and
a decision one way or the other may
produce some unsatisfactory results.’
[49]
Such a situation is par excellence one where the policy
considerations mentioned above come into play.
[50]
[51]
Before us, Cipla sought to call in aid
BHT
Water Treatment (Pty) Ltd v Leslie & another
.
[51]
The court of first instance there treated an application for an
interim interdict arising from a twelve month long restraint of
trade
as one for a final interdict. Although it was submitted in the papers
and heads of argument that this approach should have
been adopted by
Louw J, this was not the basis on which it was relied on before us.
Had this been done, the correctness of that
decision and
the
competing merits of
BHT
and
Radio Islam
would have been fully debated. It would also have raised an entirely
different basis for arguing the issue of appealability. As
Rogers AJA
mentions, this was not done.
A
s
I understood the submissions of Cipla on
BHT
,
it was that, although the form of the order granted an interim
interdict, it should be regarded as final, and thus appealable,
since
it would endure until the patent expired.
The
fact that in
BHT
the
court was persuaded to deal with an application for an interim
interdict as one for final relief does not mean that the interim
interdict granted in this matter becomes appealable.
This
is, in essence, the argument which was rejected in
Cronshaw
.
[52]
Because the correctness of the
approach of Louw J was not pursued in argument, the issue raised in
BHT
does not arise in this matter. As a result, my approach must not be
construed as authority for the proposition that the decision
of Louw
J, or any court of first instance, to deal with a matter as an
application for an interlocutory interdict rather than a
final one
can place that decision beyond appeal. I therefore respectfully
disagree with Rogers AJA that this is a consequence of
the manner in
which I deal with
BHT
.
[53]
I
t
is significant that
BHT
was also referred to by counsel in
Cronshaw
but, despite such referral, this court confined itself to the
established approach.
[52]
The fact that, in
Cronshaw
,
the restraint had all but run its course by the time the appeal was
heard did not persuade this court that the matter had become
appealable. Nor does it weigh with me in the present matter.
[54]
Quite apart from that, I might add that any such
exercise might, and in this case would, require an appeal court to
engage in crystal
ball gazing on an ex post facto basis. Such an
approach in my view would place an appeal court in an invidious
position. I accept
that Rogers AJA has undertaken this exercise to
show that, even if
BHT
is correct, it is distinguishable on the facts. As indicated, I
believe the exercise to be unnecessary and undesirable in the light
of what was argued before us.
[55]
I
wish to make it clear that I do not consider it necessary or
advisable to express an opinion on the correctness or otherwise of
the approach taken by the court of first instance in
BHT
.
That issue may arise for consideration in another matter. It does not
arise here. This appeal raises four-square the time-honoured
criteria
as to what is meant by ‘final in effect’ in
distinguishing between interlocutory and final interdicts. It
does
not implicate the correctness or otherwise of
BHT
.
________________________
T R Gorven
Acting Judge
of Appeal
Appearances
For
the Appellant:
C Puckrin SC (with him MC Seale)
Instructed
by:
Brian
Bacon & Associates Inc, Cape Town
Webbers, Bloemfontein
For the
Respondents: L Bowman SC (with him G
Marriott)
Instructed by:
IP Kisch, Pretoria
Phatshoane Henney Attorneys, Bloemfontein
[1]
See
Firstrand Bank
Ltd t/a First National Bank v Makaleng
[2016]
ZASCA 169
para 15. And see, for example,
Celliers
NO & others v Ellis & another
[2017] ZASCA 13.
[2]
Section 19(2) refers to the ‘Transvaal
Provincial Division’ which should now be read as a reference
to the North Gauteng
High Court, Pretoria.
[3]
See
Firstrand Bank
Ltd
supra para 15;
Neotel
(Pty
) Ltd v Telkom SA Soc Ltd &
others
[2017] ZASCA 47
paras
12-13. As to the meaning of ‘decision’ in s 21(1)
of the Supreme Court Act, see
Van
Streepen & Germs (Pty) Ltd v Transvaal Provincial Administration
1987 (4) SA 569
(A) at 584E-F.
[4]
S v Western Areas Ltd & others
2005 (5) SA 214
(SCA) para
20, citing
Zweni v Minister of Law and Order
1993 (1) SA 523
(A) at 532I-533B.
[5]
African Wanderers Football Club (Pty) Ltd v Wanderers Football
Club
1977 (2) SA 38 (A).
[6]
Cronshaw & another v Fidelity Guards Holdings (Pty) Ltd
[1996] ZASCA 38
;
1996
(3) SA 686
(A);
Metlika Trading Ltd & others v Commissioner
for the South African Revenue Service
[2004] 4 All SA 410
(SCA)
paras 19-21;
Maccsand CC v Macassa Land Claims Committee &
others
[2005] 2 All SA 469
(SCA) para 8;
Van Niekerk &
another v Van Niekerk & another
2008 (1) SA 76
(SCA) paras
9-14.
[7]
JR
209 Investments (Pty) Ltd & another v Pine Villa Country Estate
(Pty) Ltd
[2009] ZASCA 3; 2009 (4) SA 302 (SCA).
[8]
Para 25.
[9]
BHT Water Treatment (Pty) Ltd v Leslie & another
1993 (1)
SA 47 (W).
[10]
At
54J-56A.
[11]
See, eg,
Arrow
Altech distribution (Pty) Ltd v Byrne & others
[2007] ZAKZHC 33
;
[2008]
1 All SA 356
(D) para 2;
Maureen Allen
Inc v Jooste
[2017] ZAGPJHC 185 para
15.
[12]
Reddy v Siemens Telecommunications (Pty) Ltd
2007 (2) SA 486
(SCA) para 4.
[13]
Radio Islam v Chairperson, Council of the Independent
Broadcasting Authority, & another
1999 (3) SA 897 (W).
[14]
910I-911C.
[15]
See, eg,
Astral Operations Ltd t/a Country Fair Foods and
National Chicks v Country Bird (Pty) Ltd & another
[2006]
ZAFSHC 53
para 10;
Pansolutions (Pty) Ltd t/a Panasonic Business
Systems v Purdy
[2006] ZAGPHC 242
para 8.5.
[16]
Pfizer Ltd & another v Cipla
Medpro
(Pty) Ltd & others
2005 BIP 1; [2005] ZACCP 1 pp 10-14.
[17]
Fn 6 above at 690H.
[18]
Cronshaw
at 691B-C.
[19]
Cronshaw
690H-I.
[20]
See fn 15 above.
[21]
South British Insurance Co Ltd v Glisson
1963 (1) SA 576
(D)
at 578D-E.
[22]
In terms of
s 19(1)
of the
Patents Act the
law governing
procedure in civil cases in the high court applies to CCP
proceedings. Although rule 33(4) of the Uniform Rules
may not
strictly have been applicable to the revocation application (rule
33(4) applies only to actions), the high court would
have an
inherent jurisdiction in motion proceedings to decide certain issues
in advance of others, particularly where, as here,
the other issues
required oral evidence which would be avoided by deciding a
preliminary issue. This is consistent with s 19(1)
which states
that in the absence of any relevant provision the Commissioner shall
'act in such manner and on such principles
as he may deem best
fitted to do substantial justice and to give effect to and carry out
the objects and provisions of this Act'.
Cipla itself assumed the
existence of a power to separate the issues – it argued that
Teffo J had impliedly made a separation
order.
[23]
See
SA Eagle Versekeringsmaatskappy Bpk v Hardford
[1992] ZASCA 42
;
1992 (2)
SA 786
(A) at 789H-792H;
Marsay v Dilley
[1992] ZASCA 114
;
1992 (3) SA 944
(A)
at 962C-E.
[24]
Fn 4 above.
[25]
Western Areas
paras 25-28.
[26]
African Wanderers Football Club (Pty) Ltd v
Wanderers Football Club
1977
(2) SA 38
(A)
.
[27]
Supreme Court Act 59 of 1959.
[28]
The words ‘any decision’ in
s 16(1)
of the
Superior Courts Act 10 of 2013
hold the same meaning. See
Van Wyk v S; Galela v S
[2014] ZASCA 152
;
2015 (1) SACR 584
(SCA);
[2014] 4 All SA 708
(SCA)
para 20.
[29]
Zweni v Minister of Law and Order
1993
(1) SA 523 (A).
[30]
Prentice v Smith
(1889) 3 SAR 28 at 29.
[31]
Steytler NO v Fitzgerald
1911
AD 295
at 313.
[32]
Blaauwbosch Diamonds Ltd v Union Government
(Minister of Finance)
1915 AD 599
at
601.
[33]
Globe and Phoenix Gold Mining Company Ltd v
Rhodesian Corporation Ltd
1932 AD 146.
[34]
Globe and Phoenix
at 155.
[35]
African Wanderers
at 48G-H.
[36]
Cronshaw & another v Coin Security Group
(Pty) Ltd
1996 (3) SA 686 (A); [1996]
2 All SA 435.
[37]
Cronshaw
at
690B-C.
[38]
JR 209 Investments (Pty) Ltd & another v Pine Villa Country
Estate (Pty) Ltd; Pine Villa Country Estate (Pty) Ltd v JR 209
Investments (Pty) Ltd
[2009] ZASCA 3; 2009 (4) SA 302 (SCA).
[39]
JR 209 Investments
para 26.
[40]
At 691E-G.
[41]
Van Niekerk & another v Van Niekerk & another
2008
(1) SA 76
(SCA) para 6.
[42]
Olympic Passenger Service (Pty) Ltd v Ramlagan
1957 (2) SA 382
(D) at 383E-G, approved in
Cipla
Medpro (Pty) Ltd v Aventis Pharma SA & Related Appeal
2013 (4) SA 579
(SCA) para 40.
[43]
Knox D’Arcy Ltd & others v Jamieson
& others
[1996] ZASCA 58
;
1996 (4) SA 348
(A) at
360A-B.
[44]
Knox D’Arcy Ltd
at 360B-C. For the hypothetical situation discussed by Schutz JA
which illustrates this point see
Cronshaw
at 691B-F.
[45]
Cronshaw
at
690H-J.
[46]
Cipla’s answering affidavit stated that ‘the fact is
that the infringement action will not be completed by the time
that
the patent expires’ and that ‘[t]his is in effect and
reality, therefore, an application for final relief.’
This
was, of course, not a fact but a mere assertion.
[47]
Cronshaw
at
690H-I.
[48]
Cronshaw & another v Coin Security Group
(Pty) Ltd
1996 (3) SA 686 (A); [1996]
2 All SA 435.
[49]
Cronshaw
at 690D–E.
[50]
Cronshaw
at 691D–E.
[51]
BHT Water Treatment (Pty) Ltd v Leslie & another
1993 (1)
SA 47
(W) at 54.
[52]
Cronshaw
at 687D–E.