Oilwell (Pty) Ltd v Protec International Ltd and Others

• Jurisdiction: South Africa
• Citation: 2011 (4) SA 394 (SCA)

Oilwell (Pty) Ltd v Protec International Ltd and Others
2011 (4) SA 394 (SCA)

2011 (4) SA p394

Citation	2011 (4) SA 394 (SCA)
Case No	295/10
Court	Supreme Court of Appeal
Judge	Harms DP, Lewis JA, Ponnan JA, Malan JA and Theron JA
Heard	March 8, 2011
Judgment	March 18, 2011
Counsel	EW Dunn SC (with I Joubert) for the appellant.; P Ellis SC (with AP Ellis) for the first and second respondents.

Flynote : Sleutelwoorde F

G Exchange control — Exchange Control Regulations — 'Capital' — Meaning — Trademark not 'capital' — Currency and Exchanges Act 9 of 1933, s 9 and reg 10(1)(c).

Exchange control — Exchange Control Regulations — Transaction to export capital — Treasury permission to enter into transaction — Failure to obtain H permission not rendering agreement void — Currency and Exchanges Act 9 of 1933, s 9 and reg 10(1)(c).

Headnote : Kopnota

Regulation 10 of the Exchange Control Regulations provides that:

'(1) No person shall, except with permission granted by the Treasury and in accordance with such conditions as the Treasury may impose:

I . . .

(c)enter into any transaction whereby capital or any right to capital is directly or indirectly exported from the Republic.'

A trademark is not 'capital' within the meaning of the term used in the regulation. (Paragraphs [5], [7] and [15] at 397B – C, 398B – C and J 400G – H.)

2011 (4) SA p395

Failure to obtain prior Treasury consent for an agreement falling under A reg 10(1)(c) does not render the agreement void. (Paragraphs [15], [23], [24] and [25] at 400G – H, 403G, 404A – D and 404E – 405B.)

Cases Considered

Annotations:

Reported cases B

Southern Africa

Afrisure CC and Another v Watson NO and Another 2009 (2) SA 127 (SCA): referred to

A-Team Drankwinkel BK en 'n Ander v Botha en 'n Ander NNO 1994 (1) SA 1 (A): referred to C

Barclays National Bank Ltd v Brownlee 1981 (3) SA 579 (D): approved

Barclays National Bank Ltd v Thompson 1985 (3) SA 778 (A): referred to

Berzack v Nedcor Bank Ltd [2001] 1 All SA 410 (SCA): referred to

Botha v Fick 1995 (2) SA 750 (A): referred to

Couve and Another v Reddot International (Pty) Ltd and Others 2004 (6) SA 425 (W): overruled D

Gallo Africa Ltd and Others v Sting Music (Pty) Ltd and Others 2010 (6) SA 329 (SCA): applied

Goss v EC Goss & Co (Pty) Ltd and Others 1970 (1) SA 602 (D): criticised

Henry v Branfield 1996 (1) SA 244 (D): criticised

Legator McKenna Inc and Another v Shea and Others 2010 (1) SA 35 (SCA): referred to

Nestel v National and Grindlays Bank Ltd 1962 (2) SA 390 (A): referred to E

Oriental Products (Pty) Ltd v Pegma 178 Investments Trading CC and Others 2011 (2) SA 508 (SCA): referred to

Pottie v Kotze 1954 (3) SA 719 (A): referred to

Pratt v First Rand Bank 2009 (2) SA 119 (SCA) ([2009] 1 All SA 158): referred to F

Pratt v Firstrand Bank Ltd and Another [2004] 4 All SA 306 (T): referred to

R v Shoolman 1937 CPD 183: referred to

S v De Blom 1977 (3) SA 513 (A): referred to

S v Katsikaris 1980 (3) SA 580 (A): referred to

South African Forestry Co Ltd v York Timbers Ltd 2005 (3) SA 323 (SCA) ([2004] 4 All SA 168): referred to G

South African Reserve Bank v Khumalo and Another 2010 (5) SA 449 (SCA) ([2011] 1 All SA 26): referred to

South African Reserve Bank v Torwood Properties (Pty) Ltd 1997 (2) SA 169 (A): referred to

Standard Bank v Estate van Rhyn 1925 AD 266: applied

Swart v Smuts 1971 (1) SA 819 (A): referred to. H

Australia

Incorporated Interests Pty Ltd v The Federal Commissioner of Taxation (1943) 67 CLR 508: referred to.

England I

Lubbock v British Bank of South America [1892] 2 Ch 198 ([1891 – 4] All ER Rep Ext 1753): referred to.

Statutes Considered

Statutes

The Currency and Exchanges Act 9 of 1933, s 9 and reg 10(1)(c): see Juta's Statutes of South Africa 2009/10 vol 2 at 1-6. J

2011 (4) SA p396

Case Information

A An appeal from the North Gauteng High Court, Pretoria (Prinsloo J).

EW Dunn SC (with I Joubert) for the appellant.

P Ellis SC (with AP Ellis) for the first and second respondents.

Cur adv vult.

Postea (March 18). B

Order

The appeal is dismissed with costs, including the costs of two counsel.

Judgment

Harms DP (Lewis JA, Ponnan JA, Malan JA and Theron JA concurring): C

[1] The trademark 'Protec' (sometimes with a device) is registered in many countries but this judgment is concerned only with the South African registration (1987/10291). This word mark is presently D registered in the name of the second respondent, Protec Auto Care Ltd (Auto Care), a company incorporated in the United Kingdom. The appellant, Oilwell (Pty) Ltd (Oilwell), is a local company and seeks an order for the rectification of the trademark register to reflect Oilwell instead of Auto Care as proprietor. Oilwell relies on s 24(1) of the Trade Marks Act 194 of 1993, E which, in brief, provides that, in the event of an entry wrongly made in the register, or of any error in any entry in the register, any interested person may apply to court for the desired relief, which would include rectification.

[2] Oilwell wishes in effect to reverse an assignment of the trademark, F which took place during 1998, when, in terms of a comprehensive agreement between many parties, this trademark, as well as the foreign Protec marks and pending trademark applications, were assigned to the first respondent, Protec International Ltd (International).

[3] During the intervening years relations between the parties (or some G of them) soured. Oilwell and some associates refused to respect the rights of International and a number of orders were made against them in the USA relating to trademark infringement and contempt of court. Locally there is a final order granted during 2002 against Oilwell, interdicting it from infringing the trademark. On the other hand, H International ran into financial difficulties and, as part of what appears to be a settlement, the South African trademark was assigned to Auto Care during 2007.

[4] Oilwell discovered a judgment of Jajbhay AJ in Couve and Another v Reddot International (Pty) Ltd and Others 2004 (6) SA 425 (W). The I judgment concerned, inter alia, the validity of an agreement to assign rights to patent applications by a South African entity to a foreign company, which was entered into without the prior consent of the SA Reserve Bank, the agent of the Treasury. Couve held that within the meaning of reg 10(1)(c) of the Exchange Control Regulations a patent application and, a fortiori, a patent are 'capital' and that such an J assignment amounts to the 'export' of capital. The regulation provides

2011 (4) SA p397

Harms DP (Lewis JA, Ponnan JA, Malan JA and Theron JA concurring)

that 'no person shall, except with permission granted by the Treasury and in accordance with such conditions as the Treasury A may impose . . . enter into any transaction whereby capital or any right to capital is directly or indirectly exported from the Republic'. [1]

[5] Relying on this judgment and the fact that International was B registered in Guernsey, Oilwell applied during September 2008 to the North Gauteng High Court for the relief mentioned. Prinsloo J, who heard the case, came to the conclusion that Couve was wrongly decided, principally because intellectual property rights are not 'capital' within the meaning of the term as used in the regulation, and he dismissed the application with costs. He subsequently granted the necessary leave to C appeal to this court.

[6] Two main issues crystallised as the case unfolded. The first is whether the transaction was covered by reg 10(1)(c) and the second concerns the effect of non-compliance with the provision. The third, D prescription, does not arise in the light of what follows. But before these issues are addressed in any detail, it is necessary to refer to the empowering Currency and Exchanges Act 9 of 1933, which was adopted during the Great Depression. Its title, referring to currency and exchanges, gives a general idea of the scope of the Act, as does the long E title: 'To amend the law relating to legal tender, currency, exchanges and banking.' The term 'exchanges' refers to what is better known as 'exchange rates'. This appears from the Afrikaans text which speaks of 'wisselkoerse'. Much of the Act has been repealed, but the important s 9 remains. It empowers the head of State to make regulations 'in regard to any matter directly or indirectly relating to or affecting or having any F

2011 (4) SA p398

Harms DP (Lewis JA, Ponnan JA, Malan JA and Theron JA concurring)

A bearing upon currency, banking or exchanges' (s 9(1)). This is the empowering provision under which the Regulations were promulgated. [2]

[7] Turning then to the meaning of reg 10(1)(c), Jajbhay AJ pointed out [3] that the term 'capital' is not defined and he adopted the views of B Prof AN Oelofse [4] that, considering the wide wording of the provision and the general objects of the Regulations, 'capital' is anything (or everything) with monetary value. The court below, while disagreeing with this view because the interpretation did not take account of the general scheme of the Regulations in the light of the terms of the Act, did not reach any firm conclusion as to its meaning. I, too, do not intend to C define 'capital' in this context comprehensively, but will confine myself to the question whether trademarks are within this framework 'capital'. My conclusion will by parity of reasoning obviously apply to patents, designs and copyright.

[8] As a glance at any number of dictionaries will show, and as D Latham CJ once said, 'it is impossible to say that capital has a single technical meaning which prima facie should be attributed to the word in any statutory provision', and that 'the significance of the word [capital] in a particular case...