Leonard Dingler (Pty) v Afroberg Tobacco Manufacturing (Pty) Ltd and Others (23119/18) [2019] ZAGPPHC 176; 2019 BIP 137 (GP) (31 May 2019)

IN THE HIGH COURT OF THE REPUBLIC OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

(1) REPORTABLE: YES/NO

(2) OF INTEREST TO OTHER JUDGES: YES/NO

(3) REVISED

CASE NO: 23119/18

31/5/2019

In the matter between:

LEONARD DINGLER (PTY) LTD

Plaintiff

and

AFROBERG TOBACCO MANUFACTURING (PTY) LTD

First Defendant

ZAHIR ABDULKHALEK TURKY

Second Defendant

THE SOUTH AFRICAN POLICE SERVICE,COMMERCIAL CRIME UNIT, JOHANNESBURG

Third Defendant

JUDGMENT

LOUW, J

[1] The plaintiff manufactures tobacco products such as roll-your-own, pipe tobacco and nasal snuff, including the pipe tobacco brands Boxer and Best Blend. The plaintiff is the registered proprietor in terms of the Trade Marks Act 194 of 1993 of trade mark registration No. 2009/13383 BLACK AND WHITE in class 34 in respect of "tobacco; smokers' articles; matches". The plaintiff's trademark registration constitutes an "intellectual property right" as defined ins 1(1) of the Counterfeit Goods Act 37 of 1997.

[2] The plaintiff has instituted an action against the first and second defendants for an interdict restraining them from infringing the plaintiff's registered trade mark in terms of s 34(1)(a) of the Trade Marks Act. Section 34(1)(a) provides the following:

"The rights acquired by registration of a trade mark shall be infringed by -

(a) the unauthorized use in the course of trade in relation to goods or services in respect of which the trademark is registered, of an identical mark or of a market so nearly resembling it as to be likely to deceive or cause confusion. "

The plaintiff alleges in its particulars of claim that from at least October 2017, the first and/or second defendant has manufactured and/or sold and/or distributed and/or offered for sale in the Republic tobacco products bearing the trademark BLACK AND WHITE, which mark is identical to the plaintiff's trade mark.

[3] It is further alleged in the plaintiff 's particulars of claim that, pursuant to a complaint lodged by the plaintiff, a search and seizure warrant was issued by the acting senior magistrate, Johannesburg, which warrant was executed by the third defendant whose members, acting in terms of s 4(1)(a) of the Counterfeit Goods Act, seized and detained goods bearing the plaintiff's trade mark . The goods included a large number of completed packs of cigarettes, each

containing 20 individual cigarettes, loose cigarettes, cigarette packaging boxes, master packaging boxes, uncompleted or reject

cigarettes and a dye stamp. The plaintiff alleges that the goods which were seized, constitute "counterfeit goods" and that the first and/or second defendant 's conduct amounts to "dealing in counterfeit goods" which is prohibited in terms of s 2(1) of the Counterfeit Goods Act. The relief sought by the plaintiff is an order that the seized goods constitute counterfeit goods and that the conduct of the first and second defendants constitutes an act of counterfeiting and/or dealing in counterfeit goods.

[4] The first and second defendants filed a plea to the plaintiff's particulars of claim and a counterclaim. The plaintiff thereupon filed a notice in terms of Rule 23 to remove a cause of complaint in respect of both the plea and counterclaim. The first and second defendants responded by amending both the plea and the counterclaim. The plaintiff again filed a notice of objection in respect of both amended pleadings. The first and second defendant did not respond thereto, whereupon the plaintiff filed the present exception to the amended plea and to the amended counterclaim.

Exception to the amended plea

First complaint

[5] In paragraph 3.1 of the plaintiff 's particulars of claim, it is alleged that the plaintiff's trade mark BLACK AND WHITE is registered in respect of tobacco, smokers' articles and matches. In paragraph 7 of the defendant's amended plea, the defendant pleads the following thereto:

" Plaintiff admits that its trademark registration was only in respect of 'tobacco; smokers' articles; matches'. In no instance does the plaintiff indicate that it had a trademark in respect of cigarettes."

[6] In regard to the allegation in paragraph 4.2 of the plaintiff's particulars of claim that from a date unknown to it, but from at least October 2017, the first and/or second defendant has manufactured and/ or sold and/or distributed and/ or offered for sale in the Republic tobacco products bearing the trademark BLACK AND WHITE, which mark is identical to the plaintiff' s trademark, the first and second defendants have pleaded the following in paragraph 14 of their amended plea:

“The allegations contained in paragraph 4.2 do not correspond with the a/legations regarding the averments made at paragraph 3 relating to the defined trademark. The trademark referred to in paragraph 3 refers to 'tobacco; smokers articles; matches/ which cannot constitute offending goods in terms of the Counterfeit Goods Act 37 of 1997.”

[7] In paragraph 4.3 of the plaintiff's particulars of claim, it is alleged that, pursuant to the complaint lodged on behalf of the plaintiff, a search and seizure warrant was lawfully issued on 27 February 2018, a copy of which is annexed as annexure "LD3" to the particulars of claim. The following is pleaded in paragraph 15 of the first and second defendants' amended plea:

"It is denied that the plaintiff had the right to lodge a complaint. Accordingly, the search and seizure warrant issued on 27th of February 2018 was premised on incorrect information and on incorrect rights alluded to by the plaintiff and/or its representative relating to articles that fall within the Counterfeit Goods Act 37 of 1997.”

[8] The plaintiff's exception to paragraphs 7, 14 and 15 of the defendant's plea is that they do not disclose any valid defence based on alleged misrepresentation as the elements required to obtain relief based on a misrepresentation have not been properly pleaded. The plaintiff's complaint is that the first and second defendants have failed to address the nature of the alleged misrepresentation and/or incorrect rights allegedly relied on by the first and second defendants. It says that it is prejudiced as it is unable to understand the allegations made by the first and second defendants

and precisely what defense it is attempting to raise and that the allegations relating to the alleged misrepresentation are vague and embarrassing and that the plea contains no valid defence to the plaintiff's cause of action.

[12] In paragraph 21 of the defendant's amended plea, the first and second defendants deny that the seizure notice was based on proper information or that it was lawful, and aver that the misleading information and/or facts that was furnished by inter alia Mr. Dingler and/or Mr. Wolmarans, either verbally or in writing, as agents for the plaintiff, to the South African Police Services were:

- that the cigarettes and their packaging manufactured and sold by the first defendant breached the Trade Marks Act;>

- that the use of the words BLACK AND WHITE in relation to the production and sale of cigarettes and their packaging constituted the importation, offering for sale, sale, manufacturing, production and/or distribution of counterfeit goods in terms of the Counterfeit Goods Act which was prohibited and constituted an offense;

- that the first and/or second defendant required authorization for the use of the words BLACK AND WHITE and that the defendant's use thereof constituted an infringement in terms of section 34 of the Trade Marks Act;

[17]The plaintiff 's third ground of exception is that all allegations in the first and second defendant's amended plea relating to the plaintiff allegedly having contravened the provisions of the Competition Act 89 of 1998 have no relevance in these proceedings and as such do not constitute a valid defence to the plaintiff's claim.

[18] The plaintiff is clearly correct. The first and second defendants do not dispute the validity of the plaintiff's trade mark registration. The registration of the trade mark entitles the plaintiff to the exclusive use of the mark in respect of goods which fall within class 34 and to prevent others from so using it . The lawful use of a registered trade mark by the owner thereof cannot constitute a contravention of the Competition Act. The first and second defendants' plea relating to the Competition Act does therefore not constitute a defence to the plaintiff's claim.

Exception to the first and second defendants' claim in reconvention

First complainant

[19] In paragraph 4 of the first and second defendants' amended claim in reconvention, they repeat the alleged misrepresentations pleaded in paragraph 21 of their amended plea, referred to in paragraph 9 above. In paragraph 5 of the amended claim in reconvention, the first and second defendants allege that, as a result of the incorrect and misleading information furnished by the plaintiff and/or its agents, the first and second defendants suffered financial loss in the sum of

Rl.6 million as a result of the third defendant seizing, attaching and removing the goods belonging to the first defendant. In

paragraphs 6, 7 and 8 of the amended claim in reconvention, it is alleged that the first and second defendants suffered a further loss of profit in the sum of R2 million and that the misrepresentation of facts by the plaintiff that the first and second defendants were contravening the Counterfeit Goods Act and in terms of which the plaintiff and/or its agents sought to influence the third defendant in carrying out the seizure, attachment, removal and transportation of the goods, constituted an infringement of the plaintiff's rights of ownership and possession.

[20] In paragraph 9 of the first and second defendants' amended claim in reconvention, they repeat the allegations in paragraph 22 of their amended plea that the plaintiff abused its position in the market in terms of the Competition Act.

Conclusion

[22] In the result, I find that paragraphs 7, 14, 15, 21 and 22 of the first and second defendants' amended plea do not disclose a defence to the plaintiff's particulars of claim and that paragraphs 4, 5, 6, 7, 8 and 9 of the first and second defendants' amended claim in reconvention do not disclose a cause of action against the plaintiff.

[23] I accordingly make the following order:

(a) The plaintiff's exception against the first and second defendants' amended plea and its exception against their amended claim in reconvention are upheld with costs.

(b) The first and second defendant are afforded 15 days from date of this order to amend their amended plea and their amended claim in reconvention, if so advised.

Counsel for plaintiff: Adv. LG Kilmarten.

Instructed by: DM Kisch Inc, Sandton.

Counsel for first and second defendants: Adv. A Bhana SC.

Instructed by: ST Attorneys, Johannesburg.