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[2013] ZAGPPHC 326
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Refin Financial Services (Pty) Ltd v Carfin (Pty) Ltd and Others (67407/13) [2013] ZAGPPHC 326; 2013 BIP 470 (GNP) (8 November 2013)
REPORTABLE
IN
THE HIGH COURT OF SOUTH AFRICA
NORTH
GAUTENG HIGH COURT, PRETORIA
CASE
NO: 67407/13
DATE:08/11/2013
In
the matter between:
REFIN
FINANCIAL SERVICES (PTY)
LTD
.........................................................
APPLICANT
and
CARFIN
(PTY)
LTD
.....................................................................................
1st
RESPONDENT
GEORGE
SIMITOPOULOS
......................................................................
2nd
RESPONDENT
UNIFORUM
SA
SERVICE
..........................................................................
3rd
RESPONDENT
JUDGMENT
NKOSI
AJ:
[1]
Applicant brought an urgent application as contemplated in Uniforum
Rule 6 (12) which was heard as such.
[2]
Applicant sought to interdict the 1st and 2nd respondents from:
(a)
advertising, soliciting for business or trading under the name
“Refin” or Re- Fin”;
(b)
attracting or diverting internet traffic under the name “refin”
or “re-fin” to any of its websites;
and
(c)
operating a website www.refin.co.za or any other website with URL
which contains “refin” or “re-fin”;
[3]
Applicant further sought the 3rd respondent to deregister and/or no
longer facilitate the 1st and 2nd respondent’s operation
of the
website www.refin.co.za: and
[4]
That the 1st and 2nd respondents pay the costs or this application on
the attorney and client scale.
BACKGROUND TO THE DISPUTE
[5]
The applicant renders financial services in the motor industry. It
specialises in arranging for its customers the re-financing
of motor
vehicles and other movable assets.
[6]
The applicants stated that it has created a niche market over a short
period of time thereby establishing a good reputation
in this market.
He
has put an R1 million guarantee to its re-financier, motor finance
corporation.
[7]
The applicant changed to Refin Financial Services on 13 August 2013
without any objection. It used to trade as “Refin”,
and
established a website which is accessed by prospective customers when
they type in the URL (Uniform Resource Locator) “re-fin”.
All its administration, banking and communication modes are done or
conducted under the name “Refin”.
[8]
It was applicant’s submission that it expended substantial
amounts on promoting its “Refin” business by way
of radio
advertisements, bulk sms’s, promotions at shopping centres and
motor shows and its website. Flyers have been distributed
to
potential customers.
[9]
It was his further submission that until the respondent’s
conduct, which forms part of this application, he has been remarkably
successful. Business increased every month until mid-October when
there was a sudden drop.
[10]
The applicant became aware, on 16 October 2013, that the 1st and 2nd
respondents suddenly started trading as “Refin”,
also
that they are directing internet searches and enquiries made under
the name “Refin” to the 1st respondent’s
website.
APPLICANT’S SUBMISSIONS
[11]
It is trite that the lawfulness or unlawfulness o the respondents’
acts of competition, are to be determined, with due
regard to what
represents fairness and honesty in competition, more pertinently what
the boni mores and the general sense of justice
in the community is.
It is submitted the respondents’ actions do not pass muster.
[12]
Generally speaking it is open to anyone to adopt the ideas and
devices of his neighbour and apply it to his own goods provided
he
clearly distinguishes his goods from those of his neighbour.
[13]
To reiterate, the applicant’s case is not based on the
infringement of a registered trademark. The case is based on the
common-law dilict of “passing off and the deceptive use of the
applicant’s name in a website which causes diversion
of
business utilising the “Refin” name through the
additional/duplicate website “refin.co.za”
[14]
The use of similar words or names as explained by Galgutt AJA in:
Triang Pedigree as follows: "... a word that is invented
or
fanciful, will more readily become associated in the public mind with
the origin from a particular source that a word which
is descriptive
or in common use. It follows that the onus on a plaintiff, is to
establish that the alleged infringing mark will
cause deception or
confusion, is less easily discharged when the registered trademark
contains a word or words which are descriptive
or partly
descriptive”.
[15]
In: Burnkloof Caterers (Pty) Ltd v Horseshoe Caterers (Greenpoint)
(Pty) Ltd is was explained (at 130H) that “where a
name under
which a trader conducts his business is not a ‘fancy’
name but is one which is descriptive of his business,
the Court will
not readily assume that the use of such name is likely to lead to
confusion The reason for this is that the Court
is reluctant to
accord any one person a monopoly in a word in common use, unless of
course that word has acquired a ‘secondary
meaning’ ...
one of the first questions that arises, therefore, is whether the
name under which the applicant trades is ‘fancy’
or a
‘descriptive’ name”.
[16]
It is submitted that the applicant’s name (Refin Financial
Services (Pty) Ltd) and more particularly the name under which
it
trades “Refin” and the website “re-fin.co.za”,
is more fancy that descriptive. It is the respondent
who explains
that traditional banks were not interested in catering to the
re-financing needs of the public, hence the opportunity
in a niche
market. The word “refin” does not appear in the Oxford
Dictionary (“refine” appears).
[17]
This is not a case where a descriptive name such as “Eat-Out”
versus “Eating Out” was debated as in:
New Media
Publishing (Pty) Ltd v Eating Out Web Services CC. The concept of
Eat-Out or Eating Out is obviously descriptive. It
can be found in a
dictionary. Should the Honourable Court find that “Refin”
is descriptive rather that fancy, it will
be submitted that the
decision in: New Media Publishing (Pty) Ltd v Eating Out Web Services
CC, is distinguishable since there
the words/name was descriptive and
different words were used. In the instant matter the identical name
“Refin” is used.
The New Media Publishing case was, with
respect, in any event incorrectly decided and attention was paid to
the boni mores of society.
In: Nick’s Fishmonger Holdings (Pty)
Ltd and Another v Fish Diner in Byranston CC and Others demonstrates
a correct approach
to the matter.
[18]
The cumulative acts of the respondents cause the 1st respondent’s
“competition” to be unlawful. The adoption
of an
identical name “Refin”, as soon as applicant started as
“Refin” with the establishment of a website
with that
exact name is not fair and honest competition especially not if the
website is set up solely to divert potential customers
to the 1st
respondent’s actual website “carfin.co.za”, without
this being disclosed. Customers are kept in the
dark. It is not shown
that Carfin is the actual party.
[19]
The timing of the respondents’ endeavours is a relevant
consideration to establish the unlawfulness of the respondents’
actions. It evidences a patent attempt to hijack the custom due to
the applicant.
[20]
The 1st respondent does not in any way seek to distinguish its
business under “Refin” from that of the applicant.
As
stated in: Easyfind International (SA) (Pty) Ltd v Instaplan Holdings
& Another
1983 (3) SA 917
(W) at 925C-D “the rule is clear
that it is open to anyone to adopt the ideas or devices or his
neighbour and apply them
to his own goods, provided that he clearly
distinguishes his goods from that of the neighbour”.
[21]
It is trite that it is wrong to represent that your business is that
of another and that the question that arises is when there
is a
reasonable likelihood that members of the public may be confused in
believing that the business of the one is, or connected
with that of
another.
[22]
In: Caterham Car Sales & Coach Works Ltd v Burkin Cars (Pty) Ltd
& Another reference was made (at 947A-B) to the three
elements
(or trinity), being reputation (or goodwill), misrepresentation and
damage.
[23]
The respondents have not disputed that the applicant has established
a good reputation.
[24]
The respondents have contented themselves with mere arguments that
there is a “dearth of evidence” in this regard.
Respondent fail to deal with the applicant’s specific averments
in this regard. The averment in paragraph 5 of the founding
affidavit
has not been refuted, nor the averments in paragraph 11 of the
founding affidavit.
[25]
Potential confusion is obvious, when read with the remarks by the
applicant that there has been a sudden drop in “hits”.
[26]
Moreover the diversion of business in itself establishes damage since
many unsuspecting customers will then deal with the first
respondent,
rather than with the applicant. Do we have evidence or confirmation
that one or many unsuspecting customers were diverted?
The Court was
left to speculate.
RESPONDENT’S SUBMISSIONS
[27]
It is an undisputed fact, in terms of the founding papers, that the
applicant’s case was brought on the common law delict
of
passing-off.
[28]
It is important to indicate what the basic principles of passing-off
and what it seeks to protect and in general an applicant
must
establish two essential requirements to succeed in a passing-of
matter as outlined in the Adcock-lngram Products Ltd vs Beecham
1977
(4) SA 434
et 436-7.
(a)
that the respondent has used of is using in connection with his own
goods a name or mark, sign or get up which has become distinctive
in
the sense that they are regarded, by a substantial number of members
of the public or in the trade, as coming from a particular
source
known or unknown; and
(b)
that the use of the feature concerned is likely or calculated, to
deceive, and thus cause confusion and injury, actual or probable,
to
the goodwill of his business.
[29]
It is respondent’s submission that the proprietary right
recognised by passing-off is not a right in the name, mark or
get-up
of the product. It is the right in the reputation or goodwill which
resides in that product. This was profusely disputed
by the
respondent. It was further submitted that any trader is therefore
entitled to imitate the get-up of the viral trader. Such
imitation
will be Lawful if the trader makes it clear that the product is his
own and not that of the first user.
[30]
Reference was made to the old decision of Pasquali Cigarette Co Ltd
vs Daiconicolas & Capsolulis
1905 TS 472
at 479 where the court
held that: “A certain amount of imitation in these matters is
perfectly legitimate. If one manufacturer
sees that another
manufacturer gets up his wares in a form which attracts the public he
is entitled to some extent to take a lesson
from rival and copy the
get-up, provided that he makes perfectly clear to the public that the
articles which he is selling are
not the other manufacturer’s,
but his own articles, so that there is no probability of any ordinary
purchaser being deceived.
So long as he does that a certain amount of
imitation is legitimate.”
It
was submitted that copying of someone’s get-up is therefore not
in itself unlawful.
[31]
One tends to agree with this view otherwise there would be anarchy
where everyone is challenging everyone on something not
protected by
a legitimate trade mark.
[32]
In: The Royal Beechnut (Pty) Ltd vs United Tabacco Company Ltd 1992
(4) S 118 (A) at 112 D the then Chief Justice Corbett stated
as
follows: “It is trite Law that by adopting the trade mark of
his rival, or one so closely resembling it as to be calculated
to
deceive or cause confusion, a trader may be held to have impliedly
represented that his goods are those of his rival or that
they are
connected in some way with his rival. If such conduct causes or is
calculated to cause his rival damage, either in the
form of diversion
of custom or damage to or misappropriation of is goodwill, then the
delict of passing-off is committed and the
guilty party may be
restrained by interdict from such conduct”.
OBSERVATIONS AND WEIGHING OF ALL
SUBMISSIONS
[33]
The applicant is expected to lead evidence not only the “almost
similar pamphlets or website” but evidence taken
in totality
leading to or calculated to cause some deception to the public. One
example would be a confirmatory affidavit by a
person who was misled
into believing that he/she deals with the applicant only to find that
it was the respondent. This had to
be shown on a preponderance of
probabilities. Additional to the above the litigant must prove the
reputation he had created in
the trade mark or product.
The
sudden drop in “hits” is not supported by any evidence.
[34]
There is no single supporting affidavit to assist the court in coming
to the conclusion that the applicant has a reputation
that would in
probabilities or likelihood to be damaged or passed-off. The
applicant’s cannot sustain the requirements of
passing-off.
[35]
The applicant’s referral to unlawful competition could not be
supported with any evidence and even if it was his case
was based on
passing-off which was not proven on a balance of probabilities.
[36]
Having considered all submissions made to me I am of the view that
the respondents were able to disprove the existence of passing-off.
It
is therefore ordered as follows:
(a)
The applicant’s case is dismissed with costs.
VRSN
NKOSI
ACTING
JUDGE OF THE HIGH COURT
COUNSEL
FOR APPLICANT: ADV. JO WILLIAMS
COUNSEL
FOR RESPONDENT: ADV. R MICHAU SC
DA
TE OF HEARING: 5 NOVEMBER 2013
DA
TE OF JUDGMENT: 8 NOVEMBER 2013