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1984
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[1984] ZASCA 52
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Plascon-Evans Paints (Tvl) Ltd. v Decro Paint and Hardware (Pty) Ltd. (53/84) [1984] ZASCA 52; 1984 (3) SA 647 (A) (21 May 1984)
IN THE SUPREME COURT OF SOUTH AFRICA
(
APPELLATE DIVISION
)
In the matter between :-
PLASCON-EVANS PAINTS
(TVL) LIMITED
" appellant
AND
DECR
O
PAINT AND HARDWARE
(PTY) LIMITED
respondent
Coram
: CORBETT, MILLER, NICHOLAS, JJA, et GALGUT et HOWARD, AJJA.
Date of appeal
: 28 February 1984.
Date of judgment
: 21 May 1984.
JUDGMENT
CORBETT JA:
This appeal originates from proceedings
/
instituted
2.
instituted on notice of motion in the Orange Free State
Provincial Division ("OPD"). Appellant, a dealer in paints and allied products,
is the proprietor of a trade mark registered in terms of the Trade Marks Act 62
of 1963. The trade mark consists of the word "Micatex".
It was registered in
respect of certain goods, including inter alia paints, falling within class 2 of
the fourth schedule to the
Trade Marks Regulations, 1963.
In November 1980
appellant instituted the aforementioned notice of motion proceedings, citing
respondent, a company dealing in paints
and having its registered office in
Welkom. In the founding affida-
vit it was stated that during September 1980 it came
/to
3. to appellant's attention that respondent was marketing and selling
a type of paint, known as "texture coating", under the mark
"Mikacote". This
paint was manufactured by a company known as Van Riebeeck Paints (Pty) Ltd ("Van
Riebeeck"). Appellant alleged that
this use by respondent of the mark Mikacote
infringed its rights as the proprietor of the registered trade mark, Micatex,
and also
that respondent was unlawfully passing off its goods as those of the
appellant. Appellant claimed, with ancillary relief, interdicts
restraining
respondent from using the mark Mikacote in relation to any paint or texture
coating sold or distributed by it and from
passing off any product sold or
distributed by it as being Micatex paint, or texture coating.
/ The
4.
The Court of first instance (MALHERBE AJ) found in favour of appellant on
both issues, viz. infringement of trade mark and passing
off, and granted
interdicts accordingly. For reasons which will later become apparent appellant
filed, in reply to respondent's opposing
affidavits, certain affidavits which
were alleged by respondent to contain new matter. Respondent objected to these
affidavits in
so far as they contained new matter and applied that the offending
parts of the affidavits be struck out. In substance this appli-cation
succeeded
and the Court awarded respondent the costs of this application; otherwise the
costs followed the result. This judgment
was delivered on 25 June 1981.
Respondent appealed to the Full Bench of the OPD
/ against
5 against this decision, except in so far as it dealt
with the application to strike out. There was no cross-appeal by appellant
against
the striking out order. On appeal the Full Bench reversed the decision
of MALHERBE AJ on both the issue of infringement and the issue
of passing off,
allowed the appeal and substituted for the order of the Court of first instance
an order dismissing the application
with costs. This judgment, which was
delivered on 24 June 1982, has been reported (see
Decro Paint and Hardware
(Pty) Ltd v Plascon-Evans Paints (Tvl) Ltd
,
1982 (4) SA 213
(0) ). Leave to
appeal to this Court was granted, despite opposition from respondent, and it was
ordered that the costs of the application
be costs in the appeal.
/ Parallel
6.
Parallel litigation took place in the Cape Provincial Division ("CPD") the
parties there being the present appellant (the slight difference
in name is not
explained in the papers) and Van Riebeeck. In those proceedings, also instituted
on notice of motion, appellant claimed
against Van Riebeeck interdicts against
infringement of trade mark and against passing off, together with ancillary
relief. In the
Court of first instance the passing off claim was not pursued,
but the infringement claim was. The application succeeded in the Court
of first
instance, which granted, inter
alia
, an interdict restraining
infringement of trade mark. Judgment on that application was delivered on 9 July
1981. An
/ appeal
7.
appeal to the Full Bench of the CPD followed.
This was successful. The judgment of the Full Bench was given on 19 April 1982.
With
leave of the Court a
quo
that matter was taken on appeal to this
Court. The appeal was heard on the day before the hearing of the appeal in the
instant case.
(For the sake of brevity I shall refer to this as "the Cape
litigation".)
As regards the infringement issue the same type of evidence was
placed before the Court by the parties in the instant case as was
adduced, on
affidavit, in the Cape litigation; and it was common cause that the decision on
this issue arrived at in the Cape litigation
would be equally applicable in the
instant
/ case
8.
case. This issue is fully canvassed in the judgment of this
Court in the Cape litigation, which is to be delivered immediately prior
to the
delivery of judgment in this case. For the reasons there stated the infringement
issue must be resolved in favour of the appellant.
As regards the issue of passing off, I am of the view, substantially for the
reasons stated by the Court a quo (at pp 219 D to 222B),
that this claim for
an
interdict should fail. In essence appellant's cause
of action for passing off was based not, as is often
the case, on the deceptive resemblance of the get-up of the goods, but in the
main on an alleged course of conduct by respondent's
employees whereby they
passed off
/ the
9. the texture coating marketed under the mark Mikacote as being
appellant's Micatex texture coating. In two instances the evidence
consisted of
"trap" purchases, ie instances where persons went, at appellant's instigation,
to respondent's premises in Welkom and
ordered certain quantities of Micatex.
Although it seems possible that in their original affidavits the deponents
intended to allege
that they were served with Mikacote paint, they did not
expressly do so. In the one case (that of Mr Harwood) the furthest that the
deponent went was to allege that the cash slip issued with the goods referred to
them as tins of "Mikacoat". The sales clerk who
dealt with Mr Harwood sought to
explain this. The
/ explanation
10
explanation is not particularly convincing; nor is it very explicit,
but it implies that the "Mikacoat" notation on the cash slip
was a mistake. The
deponents Harwood and Burton endeavoured, in replying affidavits, to repair
their earlier omission to state that
they were served with Mikacote paint
(instead of Micatex, as ordered), but these were among the items ordered to be
struck out by
the Court of first instance. The only other direct evidence of
passing off is that of Mr Bruwer, the manager of the hardware department
of the
Welkom branch of Pick-n-Pay. He deposed to having telephoned respondent's shop
and having been told by an employee that the
shop stocked Micatex. This was
contrasted
/ with
11 with the evidence of Mr Howard, the manager of appellant's
Welkom branch, who stated that he told customers that respondent was
not a
stockist of Micatex. Assuming that this could be read as an averment that
respondent did not stock Micatex, it was contradicted
by Mr Becker, respondent's
managing director, who stated unequivocally that respondent did stock both
Mikacote and Micatex.
Appellant also made some point of the fact
that
respondent used certain colour names for its
Mikacote which were identical to those used for Micatex by appellant. The
colour names, viz. "Kalahari" "Umgeni Sand" and "Kirstenbosch"
appear certainly
to be unusual, but there is no evidence to show that they
were not used by other paint manufacturers.
/Finally
12 Finally, appellant referred to a letter of demand (annexure
"O" to the founding affidavit) addressed to respondent by appellant's
attorneys
and dated 17 October 1980, In the letter it is alleged,
inter alia
, that
respondent is deliberately passing off the product sold by it as Micatex. There
was no reply to this letter. Motion proceedings
were instituted just over a
month later, I do not think that respondent's failure to reply to the letter of
demand can be interpreted
as any sort of an admission on its part. Nor do I
think that these facts materially advance appellant's case on the passing off
issue.
Generally this evidence fails to establish
the
alleged passing off.
/ It ½
13 It was argued by respondent's counsel that in the event of
the appeal succeeding this Court should make a special order as to costs.
In
this connection counsel made reference to certain correspondence which passed
between the attorneys of the parties at various
stages of the litigation. Some
of this correspondence was placed before the Court a
quo
, when
application was made for leave to appeal to this Court; the remainder was
produced by the parties at the request of this Court.
The correspondence
shows:
(1) That in October 1981, after judgment had been given by VAN HEERDEN J in the
CPD and by MALHERBE AJ in the OPD and when it was
known that the appeal to the
Full Bench of the CPD
/ had
14 had been set down for hearing on 9 November 1981, it was suggested by
respondent's attorneys that the "Bloemfontein matter be
held over pending the
outcome of the Full Bench hearing in Cape Town". Appellant's attorneys replied
that they were instructed that
their client was not prepared to hold the
"Bloemfontein matter" in abeyance pending the appeal to the Full Bench of the
CPD.
(2) That in March 1983, after both appeals to this Court had been noted,
respondent's attorney wrote to appellant's attorney suggesting
that both appeals
be set down for hearing simulta-
/ neously
15 neously. Appellant's attitude, as conveyed by its attorneys some time
later, was that the appeals should not be heard simultaneously,
but on
consecutive days, if that could be arranged. It was suggested that the "Cape
matter" be heard first. As a reason for this
attitude appellant's attorneys
stated that as issues which had no relevance in the Cape case arose in the OFS
matter, it was "inappropriate"
that the two cases be "merged together".
In
the result the two cases were heard separately but
on consecutive days by
this Court.
I fail to discern in this correspondence
read against the general
background circumstances, any
/ good
16.
good ground for penalising appellant with a special order as
to costs. As regards the correspondence referred to under (1) above,
had
respondent's suggestion been followed, respondent itself would no doubt have
been keen to pursue the appeal to the Full Bench
of the OPD, once the result of
the appeal to the CPD became known. And in that situation (given the result of
the appeal to the Full
Bench of the OPD) any attempt to obtain a simul-taneous,
or near simultaneous, hearing of the two appeals to this Court might have
resulted in delay in the hearing of the appeal in the Cape matter, since it
would have had to await the determination of the OFS
matter by the Full
Bench.
/As
17
As regards (2) above, it is perfectly correct that in the OFS case
issues in regard to passing off arose which did not arise in the
Cape case.
Consequently, I cannot regard the attitude of appellant in wanting the two cases
to be heard separately as being so unreasonable
as to warrant appellant, as the
successful party, being deprived of costs.
During the course of argument before us it was revealed that respondent had
some time ago terminated its use of the Mikacote mark.
This does not relieve
this Court of deciding the issues raised by the appeal, but the question was
raised as to whether it should
have any influence on the costs. It appears,
however, that there is
/ no..
18.
no agreement between the parties as to when this occurred or as to whether
respondent informed appellant prior to the hearing that
it had ceased to use the
mark. This fact, viz the discontinuance of the use of the mark, does not seem to
me to have any bearing
on the question of costs.
The finding by this Court
that appellant establish infringement of its trade mark, but failed to prove
unlawful passing off means
(a) that in the Court of first instance an interdict
against passing off ought not to have been granted; (b) that in the Court a
quo
the appeal ought to have failed in part (on the infringement issue)
and succeeded in part (on the passing off issue); and that (c)
the appeal to
this Court succeeds in part (on the infringement issue) and fails in part
/ on
19 (on the passing off issue). The question is what order should be
made in regard to costs in all three courts.
There is no indication that the costs of
the
appearance before MALHERBE AJ were substantially
increased
by the unsuccessful reliance by appellant on passing off
as a cause of action. Success on the infringement issue
meant that
appellant achieved what it had set out to
achieve, viz. an interdict
restraining respondent from
using the mark Mikacote. And, of course, it was
the
use of this mark by respondent in relation to its
product which was foundational to both the infringement
and the passing off claims. The affidavits relating
to passing off were to some extent relevant also on the
/ question
20.
question of infringement, eg. as showing possibly a measure
of confusion as to the Micatex and Mikacote paints on the part of respondent's
employees. On the whole I see no reason why appellant should not be awarded its
costs in the Court of first instance.
As regards the costs in the Court a quo the measure of success which
respondent (appellant in that Court) ought to have achieved,
viz. the setting
aside of the interdict against passing off, could hardly be described as
substantial success. In view of the fact
that, in terms of the order which the
Court
a quo
should have made, the interdict against the use of the mark
Mikacote would stand, the victory would have been
/ essentially
21. essentially a technical one and, in my opinion, should
not have carried the costs of appeal. Nor, I may add, is there any indication
that the canvassing of the passing off issue added substantially to the costs of
the hearing.
In this Court it cannot be doubted that appellant achieved substantial
success and I do not think that its failure on the passing
off issue warrants a
special order as to costs.
It is ordered as
follows:
(1)
The appeal is allowed with costs, including the costs of two
counsel.
(2)
The order of the Court a
guo
is set aside and there is substituted the following
order:
/ "(a) The
22
"(a) The appeal is allowed to the extent that par. 1(b) of the
order the Court a
quo
is deleted; otherwise the appeal is dismissed.
(b) Appellant (Decro Paint and
Hardware (Pty) Ltd) is to pay the costs of appeal, which shall include the
costs of two counsel".
M M CORBETT MILLER JA)
NICHOLAS AJ)CONCUR.
GALGUT AJA)
HOWARD
AJA)