Principles and policy in unlawful competition: An Aquilian mask?

• Jurisdiction: South Africa
• Citation: 2000 Acta Juridica 168
• Date: 29 May 2019
• Pages: 168-195
• Published date: 29 May 2019
• Author: M M Loubser

Principles and policy in unlawful competition: An Aquilian

mask?

2000 Acta Juridica 168

M M Loubser *

University of Stellenbosch

I Introduction

It is generally recognized that remedies for patrimonial loss, as a result of unlawful

competition or unlawful trading, are based on the actio legis Aquiliae. Furthermore, the

accepted posi tion i s that there is a modern general Aq uilian action for unlawful

competition or unlawful trading in South African law - the end product of the

development of the lex Aquilia from the third century BC onwards, with many other

strands woven into it.

In Vergelding en vergoeding (1982), which deal s with aspects of the historical

development of the gen eral delictual action, Robert Feenstra refers to a 1703 treatise by

the German lawyer Christian Thomasius (1655-1728), in which Thomasius makes the

argument that the generalized delictu al action for patrimonial loss of his day was entirely

different from the actio legis Aquiliae; and that the action of his time was founded on the

precepts of natural law instead. 1 The title of Thomasius' treatise begins expressively:

Larva legis Aquiliae d etracta ('the Aquilian mask pulled down'; or in Feenstra's Dutch

translation: 'Het masker van de lex Aquilia ontrukt').

In this article I borrow the expression 'Aquili an mask', not to enter into th is broad

historical debate. My purpose is to examine to what extent th e modern general Aqui lian

action for unlawful competition and unlawful trading in South African law is what it

purports to be: Is this action, with all its remarkable flexibility and simplicity of structure,

consistently appli ed, and are th e outcomes based on coherent policy considerations? Or

does the general action for unlawful competition or unlawful tradi ng in some respects

wear an 'Aquilian mask'?

II Aquilian liability for unlawful competition

The Appell ate Division recognized as early as 1922 that th e actio legis Aquiliae may be

invoked where patrimonial loss is caused through unlawful competition. In Matthews v

Young 2 the court stated:

* BA LLB (Stell) D Phil (Oxon), Professor of Private Law, University of Stellenbosch.

2000 Acta Juridica 169

'In the absence of special legal restriction a person is without doubt entitled to the free

exercise of his trade, procession or calling . . . . But he cannot claim an absolute right to do

so without interference from another. Competition brings about interference in one way or

another about which rivals cannot legitimately complain. But the competition must itself

remain within lawful bounds. All a person can, therefore, claim is the right to exerci se his

calling without unlawful interference from others. Such an interference would constitute an

injuria for which an action under the lex Aquilia lies if it has directly resulted in loss.'

The decision of Steyn CJ in Geary and Son (Pty) Ltd v Gove 3 was a further step on the

way towards the general recognition of the actio legis Aquiliae as the b asis for protection

1 See R Feenstra Vergelding en vergoeding (1982) 14; R Zimmermann The Law of Obligations; Roman

Foundations of the Civilian Tradition (1990) 1031.

2 1922 AD 492 at 507.

3 1964 (1) SA 434 (A).

2000 Acta Juridica 168

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against unlawful competi tion in South African law; 4 and in Atlas Organic Fertilizers (Pty)

Ltd v Pikkewyn Gwhano (Pty) Ltd 5 Van Dijkhorst J stated 'that the law o f South Africa

recognizes and grants a general action in the case of unlawful competiti on, based on the

principles of the lex Aquilia'. 6 The courts ha ve applied the general principles of Aquilian

liability to many of the forms of unlawful competition that are recogni zed in South

African law, such as passing off, 7 misrepresentation as to a rival's own performance, 8

acquisition and use of a competitor's trade

2000 Acta Juridica 170

secrets, 9 copying and adoption of a rival's performance, 10 competition in conflict with

statutory provisions 11 and boycott. 12

An important implication of the recognition of Aquilian liability in the context of

unlawful competition is that new forms of protection against unlawful competition may

be developed by th e courts within the ambit of the princi ples of the actio legis Aquiliae,

even in the absence of a direct precedent in case law. It is not necessary for an

aggrieved competi tor to bring his action within the framework of one of the recognized

forms of unlawful competition or another parti cular form of delict. 13 This approach was

confirmed by the Appellate Division in Schultz v Butt. 14

4 Steyn CJ stated as follows (440-1): 'The plaintiff's action is Aquilian. It sues in delict. What it apparently

seeks to allege is the wrongful interference by a competitor with its rights as a trader. Although there is no

clear statement to that effect in the declaration as amplified, the right upon which the plaintiff may be

presumed to rely is its right to attract custom . . . . I do not propose to attempt a definition of the limits set to

competition in trade by Aquilian liability, but whatever those limits are, it seems clear that interference of the

nature indicated is recognized as an infringement of a trader's rights and therefore as a delict in our law.'

5 1981 (2) SA 173 (T) 186.

6 See also Schultz v Butt 1986 (3) SA 667 (A) at 678; Dun and Bradstreet (Pty) Ltd v SA Merchants Combined

Credit Bureau (Cape) (Pty) Ltd 1968 (1) SA 209 (C) 218; Sea Harvest Corporation (Pty) Ltd v Irvin & Johnson

Ltd 1985 (2) SA 355 (C) at 359-60; Union Wine Ltd v E Snell and Co Ltd 1990 (2) SA 189 (C) at 200-202;

Times Media Ltd v SABC 1990 (4) SA 604 (W) at 606; Aetiology Today CC t/a Somerset Schools v Van

Aswegen 1992 (1) SA 807 (W) at 816-20; William Grant and Sons Ltd v Cape Wine and Distillers Ltd 1990 3

SA 897 (C) at 915.

7 Atlas Organic Fertilizers (Pty) Ltd v Pikkewyn Ghwano (Pty) Ltd (n 5) at 201-202; Lorimar Productions Inc v

Sterling Clothing Manufacturers (Pty) Ltd, Lorimar Productions Inc v OK Hyperama Ltd, Lorimar Productions Inc

v Dallas Restaurant 1981 (3) SA 1129 (T) at 1138 and 1152ff; Salusa (Pty) Ltd v Eagle International Traders

1979 (4) SA 697 (C) at 704; Link Estates (Pty) Ltd v Rink Estates (Pty) Ltd 1979 (2) SA 276 (E) at 281;

Moroka Swallows Football Club Ltd v The Birds Football Club 1987 (2) SA 511 (W) at 519 and 520; Pepsico Inc

v United Tobacco Co Ltd 1988 (2) SA 334 (W) at 348; Tie Rack plc v Tie Rack Stores (Pty) Ltd 1989 (4) SA 427

(T) at 445.

8 See Geary and Son (Pty) Ltd v Gove (n 3) 440-1; Victor Products (SA) (Pty) Ltd v Lateulere Manufacturing

(Pty) Ltd 1975 (1) SA 961 (W); Stellenbosch Wine Trust Ltd v Oude Meester Group Ltd 1977 (2) SA 221 (C);

Elida Gibbs (Pty) Ltd v Colgate Palmolive (Pty) Ltd (1) 1988 (2) SA 350 (W) 357; William Grant & Sons Ltd v

Cape Wine & Distillers Ltd (n 6) 915; Long John International Ltd v Stellenbosch Wine Trust (Pty) Ltd 1990 (4)

SA 136 (D) 141.

9 See Dun and Bradstreet (Pty) Ltd v SA Merchants Combined Credit Bureau (Cape) (Pty) Ltd (n 6);

Stellenbosch Wine Trust Ltd v Oude Meester Group Ltd, Oude Meester Group Ltd v Stellenbosch Wine Trust

1972 (3) SA 152 (C); Prok Africa (Pty) Ltd v NTH (Pty) Ltd 1980 (3) SA 687 (W) at 696-7; Atlas Organic

Fertilizers (Pty) Ltd v Pikkewyn Ghwano (Pty) Ltd (n 5) at 189-96; Sibex Construction (SA) (Pty) Ltd v

Injectseal CC 1988 (2) SA 54 (T) 63; Meter Systems Holdings Ltd v Venter 1993 (1) SA 409 (W) at 427.

10 See Schultz v Butt (n 6) 678; Bress Designs (Pty) Ltd v GY Lounge Suite Manufacturers (Pty) Ltd 1991 (2)

SA 455 (W) at 471-5; The Concept Factory v Heyl 1994 (2) SA 105 (T) 115-17; Payen Components SA Ltd v

Bovic Gaskets CC 1994 (2) SA 464 (W) at 473ff.

11 See Silver Crystal Trading (Pty) Ltd v Namibia Diamond Corporation (Pty) Ltd 1983 (4) SA 884 (D) at 887.

12 See Hawker v Life Offices Association of South Africa 1987 (3) SA 777 (C) 780-1.

13 See Dun and Brandstreet (Pty) Ltd v SA Merchants Combined Credit Bureau (Cape) (Pty) Ltd (n 6) at 218;

Stellenbosch Wine Trust Ltd v Oude Meester Group (Pty) Ltd, Oude Meester Group Ltd v Stellenbosch Wine

Trust Ltd (n 9) 161; Victor Products (SA) (Pty) Ltd v Lateurele Manufacturing (Pty) Ltd (n 8) at 965; Sea

Harvest Corporation (Pty) Ltd v Irvin & Johnson Ltd (n 6) at 359-60.

14 See note 6 at 678. See also Payen Components SA Ltd v Bovic Gaskets CC (n 10) 473-4; The Concept

Factory v Heyl (n 10) at 115; Van Castricum v Theunissen 1993 (2) SA 726 (T) at 732; Aetiology Today CC t/a

Somerset Schools v Van Aswegen (n 6) at 817-18; Bress Designs (Pty) Ltd v GY Lounge Suite Manufacturers

(Pty) Ltd (n 10) at 473; Pepsico Inc v United Tobacco Co Ltd (n 7) at 348; Tie Rack plc v Tie Rack Stores (Pty)

Ltd (n 7) 445; Moroka Swallows Football Club Ltd v The Birds Football Club (n 7) at 520-1.

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