Africa X-Ray Industrial and Medical (Pty) Ltd v Ditaro Health Care CC

• Jurisdiction: South Africa
• Judge: Makgoka J
• Judgment Date: 30 August 2013
• Docket Number: 55101/2012
• Court: North Gauteng High Court, Pretoria
• Hearing Date: 29 May 2013
• Citation: 2013 JDR 2027 (GNP)

Makgoka, J:

[1]

This is an exception by the defendant to the plaintiff's particulars of claim on the basis that they lack the necessary averments to sustain a cause of action. After the defendant had delivered its notice of exception, the plaintiff served a notice of amendment, to which the defendant objected on the basis that the proposed amendment would not cure the basis of the exception. The plaintiff did not pursue the amendment.

2013 JDR 2027 p2

Makgoka, J

[2]

The dispute between the parties concerns the parallel importation of goods by the defendant to which the plaintiff has an exclusive agency agreement. In its combined summons, the plaintiff claims payment of R8 437 013 and an interdict restraining the defendant from selling or distributing certain medical equipment to anyone in the Republic of South Africa, except through the agency of the plaintiff, for as long as the plaintiff enjoys an exclusive agency to do so.

[3]

The plaintiff's claim originates from two agency agreements it concluded with Fuji Corporation Ltd (Fuji), a Japanese company, in terms of which Fuji granted to the plaintiff the exclusive right to sell, market or distribute certain of its products consisting of medical equipment. It is common cause that in direct competition with the plaintiff, the defendant imports similar medical equipment from China and supplies them in South Africa, after it was awarded a tender for the supply of such medical equipment to Gauteng provincial hospitals.

[4]

The plaintiff alleges that the defendant's conduct constitutes an intentional and wrongful interference with its contractual relationship with Fuji, which interference allegedly caused (and is still causing) it economic loss. The defendant denies this and contends that the plaintiff's particulars of claim do not disclose a cause of action, hence the exception. The thrust of the plaintiff's case against the defendant is encapsulated in paragraphs 9 and 10 of the particulars of claim, in which the following allegations are made:

'9.

During or about the period from 1 June 2011 up to the present, the defendant intentionally and wrongfully interfered with the plaintiff's rights in terms of the agency agreements and/or the plaintiff's commercial relationship with FujiCorp as follows:

2013 JDR 2027 p3

Makgoka, J

a.

The defendant imported Fuji products from China in direct circumvention of the plaintiff's sole agency.

b.

The defendant distributed and supplied Fuji products in the Republic of South Africa.

c.

This distribution and supply included that the defendant distributed and supplied Fuji products to the National Department of Health and its state hospitals pursuant to a tender contact RT-21-2011ME – Supply of Radiographic Material to the State – 1 July 2011 to 30 June 2013 ('the contract').

(10)

The defendant knew and intended that, by acting as aforesaid, the defendant would cause the plaintiff to suffer damages as referred to herein.'

[5]

Essentially, the plaintiff alleges unlawful competition by the defendant. The general rule relating to unlawful competition was laid down in Schultz v Butt 1986 (3) SA 667 (A) at 678:

'[E]very person is entitled freely to carry on his trade or business in competition with his rivals. But the competition must remain within lawful bounds. If it is carried on unlawfully, in the sense that it involves a wrongful interference with another's rights as a trader that constitutes an injuria for which the Aquilian action lies if it has directly resulted in loss... In order to succeed in an action based on unfair completion, the plaintiff must establish all the requisites of Aquilian liability, including proof that the defendant has committed a wrongful act. In such a case, the unlawfulness which is prerequisite for Aquilian liability may fall into a category of clearly recognised illegality ....'

[6]

A party to a contract who seeks to recover from a third party delictual damages for interference with his contractual relationship has to prove an unlawful and culpable (in the broad sense) interference. What determines whether any particular conduct is unlawful or not is the general criterion of reasonableness or the boni mores as perceived by the public (Atlas Organic Fertilizers (Pty) Ltd v Pikkewyn Ghwano (Pty) Ltd and Others 1981 (2) 173 (T) at 188H-189D; Lanco Engineering

2013 JDR 2027 p4

Makgoka, J

CC v Aris Box Manufacturers (Pty) 1993 (4) SA 378 (D) at 380G-H; Minister van Polisie v Ewels 1975 (3) SA 590 (A); Administratuer, Natal v Trust Bank van Afrika Bpk 1979 (3) SA 824 (A); Marais v Richard en 'n Ander 1981 (1) SA 1157 (A) at 1168C; Coronation Brick (Pty) Ltd v Strachan Construction Co (Pty) Ltd 1982 (4) SA 371 (D); Lillicrap, Wassenaar and Partners.v Pilkington Brothers (SA) (Pty) Ltd 1985 (1) SA 475 (A) at 498H.

[7]

In Grundlingh V Phumelela Gaming & Leisure Ltd 2005 (6) SA 502 (SCA) pars 40 the test was neatly summed up as follows:

'The test for the unlawfulness of a competitive action is essentially public policy and the legal convictions of the community. The latter concept ordinarily includes not only right-thinking members of the community who might be expected to hold a view on the particular topic but also, as Van Dijkhorst J said in Lorimar Productions Inc and Others v Sterling Clothing Manufacturers (Pty) Ltd; Lorimar Productions Inc and Others v OK Hyperama Ltd and Others; Lorimar Productions Inc and Others v Dallas Restaurant 1981 (3) SA 1129 (T) at 1153A, those involved in the...