About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Western Cape High Court, Cape Town
SAFLII
>>
Databases
>>
South Africa: Western Cape High Court, Cape Town
>>
2008
>>
[2008] ZAWCHC 237
|
|
Admiral Yacht Manufacturers (Pty) Ltd v Islan Spirit Yachts (Pty) Ltd and Others (10295/2008) [2008] ZAWCHC 237 (8 August 2008)
JUDGMENT
IN
THE HIGH COURT OF SOUTH AFRICA
(CAPE
OF GOOD HOPE PROVINCIAL DIVISION)
CASE
NO:
10295/2008
DATE: 8
AUGUST 2008
In
the matter between
ADMIRAL
YACHT MANUFACTURERS
(PTY)
LIMITED
APPLICANT
and
ISLAND
SPIRIT YACHTS (PTY) LIMITED
1
st
RESPONDENT
CATAMARAN
MARQUEE S.A. CC
2
nd
RESPONDENT
ANDRIES
CARL VAN ROOYEN
3
rd
RESPONDENT
GOLDEN
FALLS TRADING 438 (PTY) LTD
4
th
RESPONDENT
PHILLIP
SOUTHWELL t/a
SOUTHWELL
YACHT DESIGNS
5
th
RESPONDENT
JUDGMENT
LOUW.
J
:
The
applicant carries on business as a builder of catamaran yachts. The
first to fourth respondents are likewise involved in the
manufacture
and sale of catamaran yachts. The fifth respondent, Southwell, is
the designer of the Island Spirit catamaran.
During
the course of 2007, a company Fortuna Catamarans (Pty) Limited
(Fortuna), the holder at the time of the exclusive licence
granted
to it by Southwell to manufacture, market and sell the Island Spirit
catamaran, was liquidated. The third respondent,
who is, it seems,
the first respondent under another name, purchased the moulds used
to cast the Island Spirit hulls from Fortuna
in liquidation on 14
January 1008. The sale was voetstoots and without warranties as to
intellectual property. Earlier during
the course of the liquidation
of Fortuna, the applicant negotiated with Southwell and on 27 March
2007 concluded a written contract
(the Admiral contract) granting
the applicant, so it contends, the exclusive right to manufacture,
market and sell the Island
Spirit catamaran.
A
dispute has arisen between the applicant and Southwell about the
validity and status of the Admiral contract. This dispute has
been
referred to arbitration (the arbitration proceedings).
Southwell
has consented to an order prohibiting him, pending the
resolution of the arbitration proceedings from granting
any other
party the right to manufacture, market or sell the Island Spirit
catamaran.
The
applicant now also seeks orders against the first four respondents,
whom I shall refer collectively as the
respondents,
interdicting them from manufacturing, marketing or selling the
Island Spirit catamaran pending the resolution of
the arbitration
proceedings.
In
addition, the applicant seeks orders restraining the respondents
from passing off any catamaran design as the Island Spirit
catamaran, and restraining the respondents from bringing about any
changes to the design of the Island Spirit catamaran which
are not
sufficient to constitute an entirely new design, and of
manufacturing, marketing or selling, redesigned vessels.
Finally,
it also seeks an order restraining the respondents from using the
Island Spirit catamaran brand name pending the outcome
of the
arbitration proceedings.
All
the relief sought is, as I have said, pending the outcome of the
arbitration between the appticant and Southwell.
Mr
Louw, who appeared on behalf of the applicant, has conceded that the
relief sought against the respondents is final in nature,
although
it is to endure for a limited time, namely until the resolution of
the arbitration proceedings to which the respondents
are not party.
The
application was launched as a matter of urgency, and the respondents
right to challenge the application on the basis of lack
of urgency
was reserved when the matter was initially postponed when it was
first heard on 8 July 2008. The matter was finally
set down before
me in the fast lane of the motion court on Friday,
1
August
2008
r
when Mr Tyler, on behalf of the respondents, without conceding, did
not at this stage press the argument based on a lack of real
urgency.
At
the commencement of the hearing, Mr TyJer raised two issues, first
the striking out as new material of the report of a marine
engineer,
Dr Brian Gowans, which was annexed to the applicant's replying
affidavit, and further the striking out of certain plans
for
catamarans annexed to a further affidavit the applicant was given
leave to fife.
One
of the disputes between the applicant and the respondents is whether
the vessel the respondents claim they are entitled to
manufacture,
which is described in the papers as the 080 model catamaran, is in
fact the same as the 063 model the applicant
contends is the model
which it is entitled to manufacture exclusively under the Admiral
contract with Southwell.
Dr
Gowans filed an affidavit as part of the launching papers, wherein
he states the following with reference to the moulds which
the
respondents purchased from Fortuna in liquidation:-
"In
this respect I state the following with certainty:-
6.1
Moulds
are simply put on catamarans like many other yachts are made in and
extracted from.
6.2 Moulds,
however, frequently have a finite life, that means that only a
certain number of catamarans ought to be produced
from a mould.
Thereafter the mould deteriorates to a point that it should be
replaced. Even if slight modifications are made
to the mould at
such time of replacement, it still remains a mould based on the
original design.
6.3 In
other words, for a specific catamaran design there may be different
moulds, but these would all be variations of the
original design.
6.4 Changes
can be made to a design and/or the moulds to improve performance or
aesthetics, but this does not change the design
per
se.
6.5 Therefore,
if a designer or manufacturer refers to a version of a design, it
means that such version is based on the original
brand and/or
original design.
6.6
I
t
may be that a number on a drawing can be changed to denote that a
change has been made, but this does not mean that the fundamentals
of the design has been changed. In this regard the terms
"configuration control" in accordance with the ISO 9000
is employed, which refers to model numbers to identify different
variations of the same design.
In
my opinion for there to be a change in a design, basic naval
architectural aspect must change, i.e. principal dimension,
stability, etcetera. I know from my experience in surveying boats
for the European Recreational Craft Directive (for CE certification
a legally required European certification requirement) that a
significant change requires that the drawings/calculations have
to
be re-submitted. Jf the same CE certification is applied to a new
vessel, that indicates that fundamental changes have not
been made
and not taken place from the old to the new vessels.
In
addition to the above, and more specifically at the time of the
liquidation of Fortuna Catamaran (Pty) Limited (Fortuna), the
previous holder of the design rights of the Island Spirit catamaran
design, I was asked by the liquidator to do a survey on the
Island
Spirit moulds which formed part of the estate of Fortuna, because
Fortuna made certain modifications to these moulds.
My finding, as
presented to the liquidator, was that even with these modifications,
the moulds stiil constituted the Island Spirit
design.
Furthermore,
the moulds in the liquidated estate of Fortuna matched significantly
and substantially the set of drawings available
on the Island Spirit
design, namely the so-called 063 design, bearing In mind that
drawing numbers on a design may change all
the time with every
modification of the original design, say for instance if a double
room is changed into two single rooms,
that will result in a new
drawing with a new drawing number, but it will still constitute the
original yacht design. The drawings
referred to as 063 were given to
me by Mr Phillip Southwell."
It
is therefore clear that from the outset the applicant's case, as it
is set out in the launching papers, was that the catamarans
the
respondents intended manufacturing with the moulds purchased from
Fortuna were the same as the vessels the applicant claims
to have
the exclusive right for.
Dr
Gowans's opinion was not challenged directly in the answering papers
on behalf of the respondents. In its reply filed on 10
July 2008,
the applicant returned to the dispute regarding the 080 and 063
models and referred back to Dr Gowans's opinion expressed
in the
launching papers and annexed Dr Gowans's expert report given to the
liquidators of Fortuna on 1 August 2007. It is clear
that the report
cannot, in the circumstances, be considered new matter which must be
struck out.
Jn
his report to the liquidators, Dr Gowan referred to a
"representative set of drawings" furnished to him by
Southwell
and on the basis of which he expressed his opinion. In a
letter dated 11 July 2008, the respondents' attorney requested
copies
of the drawings. These drawings were provided as an annexure
to a fourth set of affidavits by the applicant dated 21 July 2008.
Dr Gowans also in his original affidavit referred to these drawings.
In
the context, the drawings and report of Dr Gowans do not, in my
view, constitute new matter which should be struck out.
I
turn to the merits of the application. The argument based on
copyright and lack of originality which was canvassed In the heads
of argument on behalf of the respondents was not persisted with by
Mr Tyler during oral argument.
The
applicant's case is in broad outline that it has acquired through
the Admiral contract, the exclusive rights to manufacture,
market
and sell the Island Spirit catamaran from the designer Southwell.
The respondents do not dispute the existence of the
admiral
contract. The respondents are in the process of manufacturing a
catamaran with moulds purchased from Fortuna. These vessels,
even if
they are termed the 080 model, are in fact, on the evidence in these
proceedings, of the same design as the 063 model
which the applicant
contends it has exclusive rights to.
The
evidence of Gowan, in my view, on the balance of probabilities
establishes that this is the case. The issue is whether the
applicant has shown that it has a clear right to exclusively
manufacture, market and sell the 063 model.
The
first issue raised in this regard is that the Admiral contract did
not afford any rights to the applicant because it purports
to confer
rights which Southwell did not at the time have to dispose of. This
is so because these rights belong to Fortuna in
liquidation. There
is no evidence that the liquidator consented to the termination of
Fortuna's rights and consequently these
rights rested in the company
in liquidation, it was contended. Whether Fortuna's rights remained
in existence after its liquidation
and whether such rights precluded
Southwell from concluding the Admiral contract with the applicant,
may or may not be, in dispute
between the liquidator and Southwell.
In my view, on the papers in this case, the doubt created in this
regard is not of such
a nature as to dislodge the balance of
probabilities in the respondents' favour.
The
next point raised by the respondents is
that
the applicant has not demonstrated that it did in fact acquire any
rights from Southwell. This is so because, it is contended,
the very
existence of the Admiral contract is in dispute between the
applicant and Southwell. In my view, the applicant has on
these
papers established, on a balance of probabilities, that it has a
clear right based on the Admiral contract, the existence
of which is
not in dispute on these papers. Without seeking to prejudge the
outcome of the arbitration proceedings, the applicant
has, in my
view, on the papers in the application, established such a right.
It
is clear that unless the respondents are interdicted, the applicant
will be prejudiced if the respondents should be allowed
to continue
to manufacture, market and sell the catamarans it claims it is
entitled to make and sell. I do not repeat the facts
in this regard
that are fully canvassed in the papers.
Finally,
given the fact that the relief sought must be given without delay if
it is to be effective, the applicant does not, in
my view
r
have an adequate alternative remedy. I Intend to follow the
alternative relief sought by the applicant in terms of which both
it
and the respondents are interdicted.
In
the result, the following order is made:-
1.
Pending the outcome of the arbitration proceedings currently
pending between the applicant and the fifth respondent:
1.1. The
respondents and the applicant are restrained from manufacturing,
marketing and selling the catamaran yacht known as
Island Spirit
catamaran and/or any variation thereof.
1.2. The
respondents and the applicant are restrained from passing off any
catamaran design as the island Spirit catamaran design
and/or any
variation thereof.
The
respondents and the applicant are restrained from bringing about in
any manner whatsoever any changes to the Island Spirit
catamaran
design and/or any variation thereof which changes are not
sufficient to constitute an entirely new catamaran design
and then
manufacture, market and sell such changed design.
The
respondents and the applicant are restrained from using, in any
manner whatsoever or for any purpose whatsoever, the Island
Spirit
catamaran brand name.
The
fifth respondent is restrained from entering into any agreement
granting any party other than the applicant the right to
manufacture, market and sell the Island Spirit catamaran.
2.
Finally, the first to fourth respondents are ordered to pay the
costs of this application.
LOUW,
J