Union Wine Ltd v E Snell and Co Ltd

• Jurisdiction: South Africa
• Judge: Van Deventer AJ
• Judgment Date: 29 November 1989
• Citation: 1990 (2) SA 189 (C)
• Court: Cape Provincial Division

Van Deventer AJ:

H This is an application for an interdict which was brought as a matter of urgency.

Although there are some prima facie disputes of fact apparent from the papers, applicant's counsel has not suggested that oral evidence ought to be heard. I have consequently applied the general rule set out in Mankowitz v Loewenthal 1982 (3) SA 758 (A) at 763A in the few instances I in which it seemed necessary, although even these were not really serious disputes.

The applicant, who is a producer of and dealer in wines, has for many years marketed inter alia the well-known Bellingham wines, so called after the famous wine estate in the Franschhoek valley where they were J first produced more than 30 years ago.

Van Deventer AJ

A One of the range of some 18 Bellingham wines is a blended semi-sweet and fruity white wine which has been marketed in South Africa since 1957 under the name of 'Bellingham Johannisberger'. It is blended from four different white grape cultivars.

The name 'Johannisberger' has not been registered as a trade mark in South Africa.

B It is common cause that 'Bellingham Johannisberger' has become extremely well known and popular as a medium priced semi-sweet wine and that it has over more than 30 years established national popularity in its price range as a good wine of fairly consistent quality. It has in fact become the best selling wine in its price bracket.

C By July 1989 this wine was being sold through more than 2 800 retail outlets and hundreds of restaurants in South Africa, achieving sales in excess of R9m, amounting to more than 50% of the turnover of all Bellingham wines.

Until July 1989 no other South African wine had ever been marketed D under the name 'Johannisberger' or any similar sounding name.

In July 1989 the respondent, who is also a liquor merchant, began to market various wines in South Africa under its own label, including a semi-sweet white wine called 'Edward Snell Johannisberger'.

This wine is also blended from a few white grape cultivars, different from those used by the applicant. Although it can also be described as a fruity semi-sweet wine, it may be said to be made according to a E different recipe.

The applicant now seeks an interdict 'restraining the respondent from using the name Johannisberger in relation to any wine advertised, marketed, sold or distributed by it'.

In August 1989 the applicant filed an application for similar relief F in the Durban and Coast Local Division under case number 5004/89. [*] That application and a copy of the judgment by Didcott J form part of the papers before me.

It is important to note that in the Durban matter the applicant's prayers read as follows: G

'(a)

That the respondent, its servants or agents, are interdicted from passing off its wine as and for that of the applicant or as associated with that of applicant by using in relation thereto the word "Johannisberger", or any other word or words so nearly resembling the word "Johannisberger" as to be likely to deceive H or cause confusion.

(b)

That the respondent be interdicted and restrained from labelling, advertising, marketing or selling any wine under any label or any other packaging or identifying material associated therewith and which label or material bears the word "Johannisberger" or any other word or words so nearly resembling I the word "Johannisberger" as to be likely to deceive or cause confusion.'

Although the applicant's case in the Durban matter was based in the founding affidavit on passing off as well as unlawful competition in the

Van Deventer AJ

A general sense, the latter basis for delictual liability was not advanced at that hearing by counsel for applicant. Didcott J was asked to decide and did decide solely the issue of passing off, ie misrepresentation, and nothing more.

The learned Judge held that no misrepresentation and no likelihood of confusion on the part of consumers had been shown and that applicant had B therefore not proved any passing off. The application was accordingly dismissed with costs.

In the premises the respondent in this matter raises the special plea of the exceptio rei judicata and/or the 'once and for all' rule. It contends, secondly, that the application is vitiated by s 43 of the C Trade Marks Act 62 of 1963, as it is in effect an action for infringement of a trade mark, it being common cause between the parties that the word 'Johannisberger' is a 'trade mark' as defined in s 2(1) of the Act.

However, by agreement between counsel these two special pleas were not argued in limine and arguments were presented in the usual order.

D Mr Van Schalkwyk, on behalf of the applicant, made it clear, firstly, that the application in this Court was not founded on passing off, deception or misrepresentation, but on the general delictual basis of wrongful or 'unfair' competition.

Following upon this distinction, he contended that the causa petendi in this matter differed toto caelo from the issues of law and of fact E adjudicated by Didcott J and that I was not being called upon to decide any factual issues relating to consumer confusion, misrepresentation or deception which Didcott J had pronounced upon.

He submitted that it was also evident from a comparison of the prayers in the two matters, in which dissimilar relief is claimed, that this F Court was not being asked to adjudicate upon the same issues at all.

Secondly, Mr Van Schalkwyk disclaimed on behalf of the applicant any exclusive or proprietary rights to or in the name 'Johannisberger'. He submitted that these proceedings therefore fell outside the range of s 43 of the Trade Marks Act.

It is advisable at this juncture to examine the applicant's cause of G action as set out in its papers.

The applicant complains (quoting from the founding affidavit)

'that respondent is intentionally competing unfairly and unlawfully with applicant by capitalising on the reputation which applicant has, over the years, built up and maintained in respect of the Johannisberger name in South Africa.'

H In a supporting affidavit, the applicant's case is put as follows:

'He (respondent) achieves in an unfair fashion and at little or no cost, a considerable advantage and positioning in the market place, in that he appropriates to himself the benefit of the name and reputation which the applicant has built up over the years at considerable trouble and expense.... He creates a situation where confusion may arise.... (T)he public will assume that another wine in the same range and with I the same qualities and attributes has been launched.'

Consequently, so it is alleged, the applicant's sales will be adversely affected through loss of custom or goodwill.

When invited to define the wrongful act complained of and the damnum allegedly caused, Mr Van Schalkwyk replied that the patrimonial loss J relied on was financial loss resulting not from respondent's use of the

Van Deventer AJ

A name, but from the respondent's appropriation of what the applicant claims to be its property, ie the goodwill attaching to the name 'Johannisberger' after applicant's marketing thereof for as long as 32 years.

In other words, although applicant had no dominium in the name itself, it had a proprietary right in the goodwill inseparably attaching B thereto, which goodwill was being filched by respondent or 'being used to gain a place in a competitive market'. The respondent was 'endeavouring to reap where it had not sown'. For this reason, it was unlawful conduct.

Mr Wallis on behalf of respondent submitted that this application remained based on the same cause of action or on a part thereof. Although the remedy pursued now might be different, the issues were the C same. The same conduct was being complained of, namely the use by respondent of the unregistered trade mark.

The crux of his submission was that the facts relied upon in the present application were the same as the facts which had given rise to the Durban application and that the claim in both matters was based on D unlawful competition of which passing off is merely an instance. (See Schultz v Butt 1986 (3) SA 667 (A) at 678G - H.)

As he put it: Every argument concerning unlawful competition which is available to the applicant in this case was available to it in the Durban proceedings. E

The exceptio rei judicatae and the so-called 'once and for all' rule

The exceptio rei judicatae and the plea of issue estoppel were recently considered in Horowitz v Brock and Others 1988 (2) SA 160 (A).

In this matter the Appellate Division held that both res judicata and issue estoppel (assuming the latter doctrine to be part of our law) F require for their operation that the same issue should have been adjudicated upon before.

The following excerpts from the judgment at 178 and 179 are relevant:

'The requisites of a valid defence of res judicata in Roman-Dutch law are that the matter adjudicated upon, on which the defence relies, must G have been for the same cause, between the same parties, and the same thing must have been demanded.'

'That where a court has come to a decision on the merits of a question in issue, that question, at any rate as a causa petendi of the same thing between the parties, cannot be resuscitated in subsequent proceedings.'

'Where the decision set up as a res judicata necessarily involve a judicial determination of some question of law or issue of fact, in the sense that the decision could not have been legitimately or rationally H pronounced by the tribunal without at the same time and in the same breath, so to speak, determining that question or issue in a particular way.'

Counsel for the applicant contends that the res judicata principle and the 'once and for all' rule, if the latter covers a wider field than the I former, are not applicable, as the issues of consumer confusion...