Steelite Towbar and Silencer Centre CC v Autofit Fitment Centre CC and Others (84301/2017) [2020] ZAGPPHC 351 (23 March 2020)

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION,PRETORIA

Case No: 84301/2017

REPORTABLE:NO

OF INTEREST TO OTHER JUDGES:NO

REVISED:YES

In the matter between:

STEELITE TOWBAR AND SILENCER CENTRE CC Applicant

and

AUTOFIT FITMENT CENTRE CC First

Respondent

JACOLETTE FOURIE Second

Respondent

GIOVANNI FOURIE Third

Respondent

JUDGMENT

MOLEFE J

[1] This is a contempt of court order against the respondents. The applicant, Steelite Towbar and Silencer Centre CC, seeks an order in the following terms: firstly, an order declaring the first, second and third respondents (‘the respondents’) in contempt of an order granted by this court on 11 January 2019; secondly, an order fining the first respondent in the amount of R100 000.00; and lastly, an order placing the second and third respondents in direct imprisonment without an option of a fine and a suspended prison sentence over the respondents. In addition, an order is sought whereof the Sheriff of the court is directed to enter the premises of the respondents wherever they may be, reference all products on which the name and logo Autofit Fitment Centre or any reference thereto appears, and to destroy such products or hand them over to the applicant for destruction. In addition, costs of suit are sought against the respondents jointly and severally, on the scale as between attorney and own client.

[2] The applicant is in the business of manufacturing and installing towbars, bullbars, cattle rails and other related products in the motoring industry and trades under the name Autobar Fitment Centre. The applicant’s trademark was registered in 1992.

[3] The second respondent is the only member of the first respondent and the third respondent is the second respondent’s husband. During 2006, the third respondent was invited to join the business of the applicant. During 2011, the first respondent, which was at that stage trading and registered under the name RD-PROFIT CC, was introduced to the applicant by the third respondent on the basis that the applicant would outsource certain work to the first respondent. The first respondent was at that time conducting its business on the premises of the applicant.

[4] It later transpired that the third respondent made certain secret profits while being in the employment of the applicant; that the third respondent had a substantial interest in the first respondent as well as fraud and other irregularities where the third respondent was involved. The applicant launched an urgent application whereby the third respondent was interdicted from entering the applicant’s premises. Disciplinary proceedings followed and the third respondent formally resigned from the applicant on 11 September 2017.

[5] On 12 October 2017, merely a month after the third respondent’s resignation from the applicant, the first respondent’s name was changed to Autofit Fitment Centre CC and the logo was changed to a logo similar to that of the applicant. The first respondent also conducted business in the same market and products as the applicant. This prompted an application and the subsequent order by Mavundla J on 11 January 2019.

[6] The court order granted on 11 January 2019 read as follows:

1. That the first, second and third respondents are interdicted from using the name Autofit Fitment Centre;

2. That the first, second and third respondents are interdicted from using the logo depicting Autofit Fitment Centre as referred to in the application;

3. That the first respondent is hereby ordered to apply for the change of its name with the Registrar of Companies in the record of CIPC from Autofit Fitment Centre, to any name that is not similar to or that may create a confusion with the name of the applicant ; and

4. That should the respondents fail to adhere to the above-mentioned order within 14 (fourteen) days from date of the order, that the applicant may approach the court on the same papers for alternative relief and/or contempt of court.

[7] After the order was granted, the respondents filed an application for leave to appeal which application was dismissed on 9 May 2019. Thereafter the respondents advised the applicant that they would proceed with a petition for leave to appeal to the Supreme Court of Appeal (‘SCA’). The respondents however failed to take the matter any further and as such the order stands.

[8] In their answering affidavit, it is the respondents’ version that towards the end of June 2019, they were advised by their senior counsel that while there was a reasonable prospect of obtaining leave to appeal from the SCA and of success in that appeal, it would be less costly and simpler to change the first respondent's name and to comply with the court order.

THE RELEVANT APPLICABLE LAW

[9] The leading case on the principles of civil contempt of court is Fakie N.O. v CCII Systems Pty Ltd[1] where contempt of court was defined as a crime of unlawfully and intentionally disobeying a court order. It is a part of a broader

offence which can take many forms, but the essence lies in violating the dignity, repute or authority of the court. Contempt of court is a deliberate, intentional refusal or failure to comply with a court order. The applicant ought to prove that:

i. there was an order granted;

ii. service or notice of the order on the part of the respondent exists; (i.e. the respondent has knowledge of the order); the respondent has not complied with the order; and wilful disregard of the order and mala fides on the part of the respondent exists.

[10] It is clear from the above that once the applicant proves the existence of the court order, the respondent’s knowledge of the court order and non-compliance, the respondent bears the evidentiary burden to show that non-compliance was not wilful or mala fide. The applicant is required to prove the elements of contempt beyond reasonable doubt.[2]

[11] In Victoria Park Ratepayers’ Association v Grayvenouw CC and Others,[3] Plaskett AJ stated:

“... it is clear that contempt of court is not merely a mechanism for the enforcement of court orders. The jurisdiction of the superior courts to commit recalcitrant litigants for contempt of court when they fail or refuse to obey court orders has at its heart the very effectiveness and legitimacy of the judicial system. . . That, in turn, means that the court called upon to commit such a litigant for his or her contempt is not only dealing with the individual interest of the frustrated successful litigant but also, as importantly, acting as guardian of the public interest.”

[12] It is common cause that a court order was granted on 11 January 2019. The respondents were represented during the main application as well as during the application for leave to appeal. The respondents admit that they have knowledge of the order and that the order was brought to their attention.[4]

[13] The respondents’ counsel submitted that the first respondent had in fact complied with the court order and that legal advice was given to the respondents that not using the words ‘Fitment Centre’ in their name or logo and rather using different words while retaining the word ‘Autofit’ was not unreasonable. This advice was accepted by the respondents and it was argued that it therefore does away with the allegation that their actions in this regard were mala fide,

[14] Counsel for the respondents argued that the only words common in the applicant’s name ‘ Autobar Fitment Centre’ and the first respondent’s name ‘Autofit Fitment Centre’ were the words ‘Fitment Centre’. Central to the issues in this matter is therefore the determination of whether in any of the orders granted it is the usage of the compound name ‘Autofit Fitment Centre’ which was prohibited or rather the single use of the word ‘Autofit’. It is therefore submitted that the court ordered a prohibition against the use of the name ‘Autofit Fitment Centre’ and not the word ‘Autofit’.

[15] I do not agree with the respondents’ argument. The respondents in their opposition select to interpret the court order to suit their needs. In Weber Stephen Products Co v Alrite Engineering (Pty) Ltd and Others,[5] the Appeal Court stated as follows:

“To determine the content and ambit of the interdict it will accordingly be necessary to read the order of the Full Court in the light of its judgment, and the judgment of van Zyl J insofar as it has not been disturbed on appeal.”

[16] In the trademark registered in the name of the applicant in casu, it is clearly indicated that “the registration of this trade-mark shall give no right to the exclusive use of the wards 1Fitment

Centre', separately and apart from the mark.” [6]

[17] Mavundla J had to say this in his judgment:

“The respondents as newcomers, had the responsibility to ensure that their outfit bears no resemblance to that of the applicant so as to avert any reasonable likelihood of deception or confusion. . .”[7]

[18] The applicant’s counsel relied on the following quote which finds relevance to this case:[8]

“The interdict in a passing-off case must accordingly seek to ensure that the business or merchandise in question will in future be clearly distinguished from that of the successful plaintiff or applicant. How the defendant is to do that is not normally indicated. As was said by Greene MR in a well-known passage from his judgment In Wright, Layman & Umney Ltd v Wright [1949] 66 RPC 149 (CA) at 152 lines 40-4:

‘It has been said many times that it is no part of the function of this court to examine imaginary cases of what the defendant could or could not do under this form of injunction . The best guide, if he is an honest man, is his own conscience, and it is certainly not the business of this court to give hints instructions or hints as to how near the wind he can sail.’’’

[19] The applicant obtained evidence of the respondents’ non-compliance with the court order in the following categories:

Ad website-First Respondent

[20] The applicant submitted that as at 27 June 2019, the first respondent’s website still showed the name ‘ Autofit Fitment Centre’ and the same logo with the names ‘sales@autofit.co.za’ were being used. A rollerbar bought in Pretoria on 12 July 2019 clearly depicted the same logo as the one complained of in the application. [9]

[21] The respondents do not dispute the allegations made regarding the website,[10] but argued that the name ‘ Autofit Fitment Centre’ is not used although the website address is ‘autofit.co.za’. Of importance is that the respondents alleged that the logo complained of is the first respondent’s business address in George, and deny that on 27 June 2009 , the first respondent was conducting business in Pretoria. This is despite the fact that a rollarbar was ordered and delivered in Pretoria on 12 July 2019. In my view, this is a clear proof of failure to adhere to the court order.

Ad Facebook Profile - First Respondent

[22] On 27 June 2019, the applicant obtained images of the Facebook profile of the first respondent portraying various images of the logo as well as the name ‘Autofit Fitment Centre’.[11] The respondents’ submission is that on 27 June 2019 they had not received advice from their senior counsel that the petition would not be proceeded with. In my view, this submission has no merit. This is clear proof of a failure on the part of the respondents to adhere to the court order.

Ad Facebook and WhatsApp Profile - Third Respondent

[23] The applicant provides various images obtained of the third respondent’sFacebook and WhatsApp profile taken on 27 June 2019.[12] The applicant’s counsel submits that these profiles contain the logo complained of and depicts the name ‘Autofit’ which the respondents are interdicted from using.

[24] The respondents’ submission is again that on 27 June 2019 it was the period when the respondents were under the impression that a petition to the SCA had or was in the process of being lodged and that the order was suspended. This is once again definitive evidence of contempt of the court order.

First Respondents new premises in George

[25] The applicant provides various photographs taken of the signage of the first respondent’s new business premises on 1 July 2019 depicting the logo as well as the composite name ‘ Autofit Fitment Centre’, clearly and visibly displayed1[13]

[26] The respondents do not deny that those are photos of the business premises as at the date but their response is that the photographs

‘were probably taken during June 2019.’[14] Counsel for the respondents submitted that the signage had been taken down before the launch of the contempt application and that the respondents apologise for the erection of the signs if they constituted non-compliance with the court order. This is therefore clear evidence of non­ compliance with the court order.

Tax Invoices and Quotations

[27] The applicant obtained invoices and/or quotations from the first respondent dated 1 July 2019 also depicting the composite name and the logo which the respondent were interdicted from using and depicting the Pyramid, Pretoria address. The applicant also presented a printout of a website of one of its clients/suppliers where the interdicted name of the first respondent appears.

[28] The respondents admit that the invoice was indeed issued by the first respondent but explain that as the name change had not yet been effected at the CIPC, the first respondent had not yet h d new stationery printed and therefore used it existing pre-printed stationery, and accepted that it was a mistake to have done so, and apologised for doing so.[15] Regarding the supplier who listed the first respondent under the name “ Autofit Fitment Centre’, the respondents’ submission is that the listing was not done by themselves, but by the supplier and that this took place prior to the interdict being granted.

Logo depicting ‘Autofit Fitment Centre’

[29] As aforementioned, the respondents were interdicted from using the logo depicting ‘Auto Fitment Centre’ and as referred to in the application, Counsel for the respondents argued that clearly, the logo complained of as constituting contempt of court when used does not depict ‘Autofit Fitment Centre’ but consists of the word ‘Autofit’ end an email address ‘sales@autofit co.za It is therefore submitted that under the circumstances1 the use of the present logo by the respondents does not constitute a contravention of the order and that in light of the advice given by senior counsel, does not constitute contempt of court.

[30] I do not agree with the respondents’ argument. Mavundla J’s judgment is clear:

“The similarities between the corporate logo of the applicant and the respondent are strikingly similar. The first respondent even adopted a similar font, colour and more specifically the yellow line in the logo which was uniquely designed by the applicant long before the first respondent changed its name.[16]

[31] Counsel for the respondents went to great lengths to explain the minor differences in the fonts in the logo. In my view, the respondents are in clear contempt of the court order.

Changing of name at CIPC

[32] The court ordered the first respondent to apply for the change of its name with the Registrar of Companies in the record of the CIPC from ‘Autofit Fitment Centre’ to any name that is not similar to, or that may create confusion with the applicant’s name. Counsel for the applicant submitted that on 26 August 2019, the name of the first respondent was still depicted as ‘Autofit Fitment Centre’ on the CIPC database. It is argued that the respondents are therefore still in contravention of the court order.

[33] The respondents' defence is that the second respondent, on behalf of the first respondent, instructed Morne Moore Financial Service to commence the process for the change of the name. This is supported by a letter dated 2 August 2019 from HSP Consulting.[17]

[34] On closer inspection of the CK2A,[18] it indicates that only the first respondent's address was changed. I have also noted that even at the hearing of this application, the respondents provided no proof that the first respondent's name had been changed from the interdicted name. The respondents are therefore in contravention of the court order,

Email Addresses and Website

[35] The applicant submits that the respondents made no effort to change the website and email addresses after the court order. The respondents argue that the court never ordered that any of the respondents were not entitled to use their old e­ mail addresses.

[36] Again, this argument has no merit. The Mavundla J judgment stated the following:[19]

“It is common cause that Jacolette Fourie and Giovanni Fourie whilst they were In the employ of the applicant were using respectively the following e-mail addresses: jacolette@autofit.co.za and gio@autofit.co.za . They are no longer in the employ of the applicant, and therefore the use of those respective addresses is disingenuous and calculated in my view, to harvest the applicant's clients, whose particulars are in those email addresses and/or who would still contact them believing that the respondents are still with the applicant. . . When they start their own business, they should not retain anything that would still link them to the applicant”.

[37] As aforementioned, the existence of the court order and the respondents knowledge of the court order is common cause. Although the respondents dispute that there was non - compliance with the court order and argued that there is no order of this court preventing the respondents from using the word ‘Autofit’ rather than the composite name ‘Autofit Fitment Centre’, I am satisfied that it has been proved beyond reasonable doubt that the respondents have breached the court order dated 11 January 2019.

[38] The next question is whether such breach has been proved beyond reasonable doubt to have been committed deliberately and mala fide by the one, the other or all the respondents. The respondents' main defence is that they were advised by their senior counsel, which

advice they accepted, that not using ‘Fitment Centre ’in their name or logo, and rather using different words while retaining the ‘Autofit’ was not unreasonable and deny that such non-compliance was wilful and mala fide.

[39] The respondents’ counsel pointed out that there is an ongoing dispute between the parties and ongoing litigation arising from the business conducted by the applicant and the third respondent’s previous share therein.

[40] In my view, all the evidence advanced, as well as the history of the parties’ relationship, is a clear indication that the respondents’ actions were wilful and mala fide. The respondents are therefore guilty of contempt of court.

[41] In Pheko and Others v Ekurhuleni Metropolitan Municipality (No 2) ,[20] the Constitutional Court made the following remarks regarding contempt of court orders:

“The rule of law, a foundational value of the Constitution, requires that the dignity and authority of the courts be upheld. This is crucial, as the capacity of the courts to carry out their functions depends upon it. As the Constitution commands, orders and decisions issued by a court bind all persons to whom, and organs of the state to which they apply, and no person or organ of State may interfere in any manner, with the functioning of the courts. It follows from this that disobedience towards court orders or decisions risks rendering our courts impotent and a judicial authority a mere mockery. The effectiveness of court orders or decision is substantially determined by the assurance that they will be enforced.”

[42] The third question is whether the non.-compliance was wilful or mala fide, Although the evidentiary burden of proof in relation to wilfulness and mala fide, which entails that should the respondents fail to advance evidence that established a reasonable doubt as to whether their non-compliance was wilful or mala fide, the law dictates that the applicant would have proved contempt beyond reasonable doubt.

[43] In my view, the respondents have not provided any evidence that establishes a reasonable doubt as to the question whether their

actions were wilful and/or mala fide. The respondents’ version that they were advised by senior counsel that they were only prohibited from using the name ‘ Autofit Fitment Centre’, and not the single word ‘Autofit’ is unreasonable and mala fide. The evidence advanced by the applicant, as well as the history of the parties’ relationship, is a clear indication of the respondents’ wilful and mala fide actions. I therefore find the respondents guilty of contempt of the court order.

Ad Proper Penalty

[44] Counsel for the applicant proposed that a proper penalty shall be to impose a fine or direct imprisonment suspended for a period, on condition that the second and third respondent adhere to the court order.

[45] The object of the contempt of court proceedings which concerns the wilful refusal and/or faill.lr to comply with a court order, is the imposition of a penalty in order to vindicate the court’s honour consequent upon the disregard of its order and to compel the performance thereof. I would be failing in my duty if I do not impose a punishment which shows my displeasure at the respondents’ non-compliance with the court order , However a court is loath to restrict personal liberty of individuals in matters of this kind and if a period of imprisonment is imposed, it is usually or often suspended.[21]

[46] The Constitutional Court in Matjhabeng Local Municipality v Eskom Holdings Limited and Others·, Mkhonto and Others v Compensation Solutions (Pty) Limited,[22] cautioned that:

“Frequently, the resultant committal to prison violates the right to freedom and security of the person -- which includes the right not to be deprived of freedom arbitrarily or without just cause and not to be detained without trial - in terms of s 12(1) and the fair trial rights in terms of s 35(3) of the Constitution.”

[47] I therefore make the following order:

1. The first, second and third respondents are declared to be in contempt of the court order dated 11 January 2019 issued under case number 84301/2017 by his Lordship Mavundla J;

2. The first, second and third respondents are each fined R10 000.00 payable within 14 days of the date of this order;

3. The second and third respondents are sentenced to 30 days’ imprisonment, suspended on condition that they comply with the court order dated 11 January 2019;

4. The first respondent is ordered to remove the name and logo ‘Autofit Fitment Centre’ or any reference thereto from all its products, advertising matters and other documents in its possession or under its control, that would likely deceive or cause confusion;

5. Within 14 days from the date of this order the first respondent is to produce proof by affidavit by a duly authorised representative that it has complied with 4.above;

6. The respondents are jointly and severally to pay the costs of this application.

D.S.MOLEFE

JUDGE OF THE GAUTENG

DIVISION,PRETORIA

APPEARANCE:

For Applicant:

Adv.E Janse van Rensburg

Instructed by:

Baartman &du Plessis Attorneys

For Respondent:

Adv. D M Leathern SC

Instructed by:

Van Heerden & Krugel Attorneys

Date of hearing:

25 February 2020

Date of judgment:

23 March 2020

[1] [2006] ZASCA 52; 2006 (4) SA 326 (SCA) at para 6 and 10.

[2] Fakie supra n 1 at para 42.

[3] 2004 (3) AII SA 623 (SE) para 23.

[4] Opposing affidavit page 121 at para 2.1.

[5] [1992] ZASCA 2; 1992 (2) SA 489 (A) at 494-H.

[6] Bundle page 36 main application, Annexure ‘E’

[7] Bundle page 59 at para 34.

[8] Weber-Stephen Products Co supra n 5 at500.

[9] Bundle page 103,Annexure ‘ PMP 41’.

[10] Bundle pages 83-89, Annexure ‘PMP 21’-‘PMP27’.

[11] Bundles pages 90-96,Annexures ‘PMP 28’ –‘PMP31’’,-‘PMP34’’.

[12] Bundle pages 97-99, Annexure ‘PMP35’-‘PMP37’.

[13] Page 134, para 21.1.

[14] Bundle page 100-101, Annexures ‘PMP 38’ and ‘PMP 39’.

[15] Answering affidavit page 135, para 22.2.

[16] Bundle page 58, para 26.

[17] Page 156, annexure “AA8”.

[18] Page 155.

[19] Page 59, para 35.

[20] 2015 (5) SA 600 (CC) at para 604

[21] Herbstein and van Winsen,The Civil Practice of the Superior Courts in South Africa,2nd ed at 583.

[22] 2018 (1) SA l (CC) at 6 7