IN THE HIGH COURT OF SOUTH AFRICA(CAPE OF GOODHOPE PROVINCIAL DIVISION)

REPORTABLE

CASE NO. 9289/2004

In the matter between:

THABANI WINES (PTY) LTD. 1st Applicant

JABULANI NTHANGASE 2nd

Applicant

And

DARLING CELLARS (PTY LTD. 1st

Respondent

GROENKLOOF DRANKHANDELAARS

(EDMS) BPK 2nd

Respondent

SANDS TRADERS CC 3rd Respondent

JUDGMENT DELIVERED ON 10 AUGUST 2005

DLODLO, J

INTRODUCTION

1) On 1 November 2004 the Applicants brought an urgent

application for a Rule Nisi with immediate effect,

restraining the Respondent from distributing wines bearing

its logo or trade mark. On 5 November 2004 the Court

granted an order returnable on 24 February 2005

containing the undertaking by the First and Second

Respondents not to sell wines bearing the First Applicant’s

logo. The purpose of the Application is therefore to obtain

an interdict against the Respondents restraining them from

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distributing bottles of wine containing labels with a trade

mark and distinctive logo registered in the name of and for

the benefit of the Second Applicant’s business.

2) The Respondents in opposition to the applicant’s

application contended inter alia, that the First Applicant

was obliged to buy all the wines within the first year after

their being bottled. The Respondents contended further

that there existed the second agreement in terms of which

the First Applicant would purchase all the wines within four

weeks from the date of that agreement, namely 13

February 2004, failing which all the stock would be sold at

a price that the First Respondent could get for it. Mr.

Rautenbach appeared for the Applicants whilst Mr.

MacWilliams appeared for the Respondents.

FACTUAL BACKGROUND

3) The First Applicant, Thabani Wines (Pty) Ltd., is a duly

registered company under the company laws of the

Republic of South Africa, having its registered address and

main place of business at 6 Binneplein, Stellenbosch, South

Africa. The Second Applicant, Jabulani Ntshangase, is

employed as the Managing director of the First Applicant.

One Mr. Trevor Steyn is both the Second Applicant’s

partner and also a director of the First Applicant.

4) The First Respondent is Darling Cellars (Pty) Ltd., a duly

registered company in terms of the company laws of the

Republic of South Africa, having its place of business at

Mamreweg, Darling, district Malmesbury. The Second

Respondent is Groenkloof Drankhandelaars (Edms) Bpk,

having its registered address and place of business at

Mamreweg, Darling, district Malmesbury. The Second

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Respondent is the marketing arm of the first Respondent.

The third Respondent is a duly registered Close Corporation

with its head office at 34 Sipres Crescent, Eden Park, Cape

Town.

5) The trademark in question is “Thabani vineyards and

Winery” registered with the Registrar of Trade Marks for

various classes of goods, evidenced by the certificates.

During the year 2000 the Second Applicant negotiated on

behalf of the First Applicant with the First Respondent and

the Land and Agricultural Bank of South Africa Limited (the

Land Bank). The negotiations culminated in the conclusion

of an agreement between the parties on the following

terms:

(i) The First Respondent would identify grapes and make

wines on behalf of the First Applicant.

(ii) Such wines would be bottled and labelled with the

trade mark and logo by the First Respondent.

(iii) The wines would be purchased as bottled and

labelled by the First Applicant from the First

Respondent, for resale into the wholesale or retail

market.

(iv) The Land Bank provided the Second Applicant with a

line of credit in the sum of plus minus R8,5 million in

terms of which, against delivery of orders of wines

bottled and labelled by the first Respondent as

aforesaid, the Second Applicant would pay by way of

irrevocable letters of credit in the appropriate

amounts charged by the First Respondent for wines

delivered from time to time.

(v) Although the specific wines were not exclusively

made for use by the first Applicant or second

Applicant, and the First Respondent would be entitled

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under its own or any other label that it could lawfully

use, to distribute such wine, as the exclusive holder

of the trade mark and the copyright in the labels, the

Second Applicant was entitled to determine the use

of the trade marks in the trade.

(vi) The First and Second Respondents had no right to

use the trade mark or the copyrighted material in the

label for any purpose other than to deliver bottled

and labelled wines in terms of the above

arrangement to the first Applicant.

6) In the winemaking industry it is common practice for wine

cellars to agree with individuals or companies who wish to

trade in wines under a trade mark or brand of their own

choice, that wines will be made, bottled, labelled and

delivered by the cellar to such a company or individual who

does not otherwise have access to winemaking and bottling

facilities. In such a case it is not uncommon for the cellar to

make the wine for and at the instance of a number of

brands or brand holders, and to deliver the wine in

distinctive labelled bottles for the benefit of such brand

holders. Such wine is then sold into the market by the

brand holders without any way for the marketplace to

identify the wines as being similar or identical to wines

distributed under a different label.

7) It is common cause that the Second Applicant was actively

engaged on behalf of the First Applicant in creating and

promoting the brand attaching to the trade mark which is

the subject of this application. These entitled huge financial

expenditures and many hours spent in perfecting the

design of the logo and in conceiving the trade mark

Thabani. The Second Applicant negotiated with and

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instructed the production department of the first

Respondent to commission the production of labels. The

labels were designed by artists and the artwork signed off

by the Second Applicant every time a new batch of labels

were ordered and printed for labelling the wines of the First

Applicant. The purpose of the quality control is to ensure

that labels conformed to the requirements of the first

Applicant and in particular to conform to the prescripts

inherent in the trade mark itself registered with the

Registrar of Trade Marks.

8) The Second Applicant contends that it is an integral aspect

of the marketing strategy of the First Applicant’s wines that

the wines are marketed to consumers as a relatively

upmarket wines. These wines are presently served by the

Arabella Sheraton Hotel in Cape Town in their restaurants

at approximately R70.00 a bottle, a price deemed of

sufficient quality. Thus the image attaching to the brand

has been regarded as sufficiently upmarket to induce an

upmarket institution such as the Arabella Sheraton to serve

the wine to their predominately upmarket customers.

9) In the wine industry many factors go into the determination

of the price of a wine in the wholesale or the retail market.

The price of the ingredients and the labour used in

manufacturing the wines are not the sole or even very

important determinants of the price in the majority of

cases. The price of wines is determined in the first place by

the assessment of the wine by connoisseurs in the

marketplace in terms of the wine’s quality as well as the

accompanying branding of the wine identifying it as a wine

of a specific status in the marketplace.

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10) On Monday 25 October 2004 the Second Applicant received

information from one Mr.Emile Bootsma of the Arabella

Sheraton Hotel that he and his wife had purchased bottles

of the First Applicant’s wine (the Sauvignon Blanc 2002)

from the Canal Walk branch of Aroma Drop Inn, a liquor

outlet in Century City, Cape Town, for the sum of R14.99

per bottle. This was shocking news to the Second Applicant

because in terms of the strategic pricing structure of the

First Applicant, the same wines are sold to the Arabella

Sheraton for the sum of R26.00, which then retails the wine

to its customers on the tables of its restaurants for

approximately R70.00. The Second Applicant immediately

realised that the only source of the wines could have been

the First Respondent or, as its marketing arm, the Second

Respondent. Neither the First Applicant nor the Second had

supplied any wines to any retailer at any price that would

have enabled it to sell it at the retail price of R14.99.

Aroma Drop Inn was never a customer of the First

Applicant. The availability of the First Applicant’s wines at

Aroma Drop Inn Canal Walk and the pricing thereof was

subsequently confirmed and established as the truth.

11) Attorneys instructed by the Second Applicant forwarded a

telefax to the First Respondent placing on record the

alleged infringement of the trade mark and demanding that

an undertaking be given and certain other relief in order to

protect the interest of the First Applicant. This telefax

resulted in the receipt by such attorney from JS Spamer

and Associates (Attorneys acting for the First Respondent)

of the following response:

“Our client does not intend to debate the agreement

between itself and your client, or any terms thereof,

through correspondence, save to say that your client has

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breached the agreement and as result our client has

exercised its rights under the same …………..Our client

however denies that it has acted in contravention of

section 34 of the Trade Marks Act or that it acted

unlawfully in any way.

Under the circumstances our client will not be providing you with the confirmation as requested by yourself nor will it account to your client as requested.”

THE APPLICANTS’ CASE

(12) The founding affidavit filed on behalf of the Applicants was

deposed to by Mr.Jabulani Ntshangase, the Second Applicant

and the Managing Director of the First Applicant.

He contended that the response to the Applicants’ attorneys

from the First Respondent’s attorneys makes it obvious that

the First Respondent:

i) Did not deny that it had distributed bottles of the First

Applicant’s wines to the marketplace, which ended up

on the shelves of Aroma Drop Inn.

ii) That such wines contained labels of the First Applicant

as contended in the Applicant’s letter of 27 October

2004.

iii) That the wines were distributed to parties other than the

Applicants.

(13) Mr. Ntshangase further averred that the First Respondent’s

failure and/or refusal to grant an understanding sought by the

First Applicant made it obvious that the former did not intend

ceasing and/or desisting from the practice of distributing

wines labelled for and on behalf of the First Applicant which

contain the latter’s distinctive logos and trade mark. In the

views of Mr.Ntshangase the inference which is reasonable is

that the First Respondent intends continuing with the

distribution of wines containing labels with the relevant trade

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marks and logos to the marketplace.

(14) Mr. Ntshangase averred further that it appears from the First

Respondent’s response that the latter contends that it was

entitled to sell bottles of wine containing the labels referred to

above, for reasons flowing from an alleged breach of contract.

Mr. Ntshangase in his affidavit hastens to deny that he is

guilty of any such breach of contract. In his knowledge neither

did the First Applicant commit such breach. Mr. Ntshangase

contended that certainly the actions of the Respondents

constituted a breach of section 34(1) of the Trade Marks Act

No. 194 of 1993 in that he never authorized the use of the

trade marks in the course of trade such as in the instant case.

Explaining further, Mr. Ntshangase categorically stated that

“the only purpose, for which the trade mark could be used by

the Respondents, was to sell bottles labelled on behalf of the

First Applicant directly to the First Applicant, and to no one

else”. He concluded that therefore the actions of the

Respondents also constituted breach of the First Applicant’s

rights as exclusive licensee of the copyright in the logo.

(15) Mr.Ntshangase emphasised that the sale of the wine bottles

labelled and bearing the trade mark of the First Applicant to

Aroma Drop Inn directly or through an intermediary has

resulted in, and will continue to result in, huge detriment to

the distinctive character and repute of the registered

trademark. In his view, the impression is created in the

marketplace that the wine being sold to the public at the

ridiculously low sum of R14.99 is in fact a cheap wine. He

contended that the consequence is that many consumers in

the marketplace who had correctly built up a perception of the

First Applicant as representing a relatively upmarket wine,

will, consequent to the First Respondent’s actions, no longer

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hold that perception and that will result in potentially massive

losses to the First Applicant. The losses will potentially run to

hundred of thousands of rands. Mr. Ntshangase, by way of

illustration mentioned that the First Applicant’s trade

amounted to approximately R1 000 000.00 turnover per year,

an amount which hopefully must be increased.

(16) Dealing with the question of prejudice, urgency and

alternative remedies, Mr. Ntshangase averred that in an

endeavour to contain the damage flowing from the unlawful

actions of the Respondents, he pursued a strategy of

telephoning branches of Aroma Drop Inn in the Western Cape

in order to establish from them whether they carried the label.

He gathered from Aroma Drop Inn in Claremont, Cape Town,

that it was no longer offering any of the First Applicant’s wines

for sale. Mr. Ntshangase gathered an explanation from the

Aroma Drop Inn Claremont that sales of these wines had been

“frozen” and that there was “a problem” with selling the wines

to the public.

(17) The Aroma Drop Inn (Pty) Ltd. gave an undertaking not to sell

the First Applicant’s wines. Consequently Aroma Drop Inns

(Pty) Ltd is not party to these proceedings. Because the First

Respondent refused to grant an undertaking requested,

contended Mr. Ntshangase, it cannot be assumed that

delivery of wines will be made to Aroma Drop Inn only. There

are countless different businesses and outlets offering liquor

for sale in this Province and that, according to Mr. Ntshangase,

renders it impossible to predict to whom the First Respondent

would cause these wines containing the offending trade mark

and label to be delivered. In Mr. Ntshangase’s view the

Applicants thus had no alternative remedy but it had to

approach this Court on urgent basis.

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(18) He stressed that had it not been for a very good relationship

he have with the Arabella Sheraton Hotel, in whose hotel foyer

he conducts a liquor outlet under the trade name of Grand

World of Wines (an entity owned by a separate Close

Corporation), the Applicants would very well have been ousted

from the Arabella Sheraton Hotel. This he says because the

Arabella Sheraton Hotel purchases wine directly from the First

Applicant for offering same to its customers/clients. Mr.

Ntshangase had to hold important business discussions with

the relevant managers at the Arabella Sheraton Hotel in order

to remove any distrust arising out of the action of the First

Respondent. This he had to do in order to prevent the Hotel

from discontinuing stocking the Applicants’ wines. His fear,

however, is that it would not be possible to do so indefinitely

and in respect of all possible outlets because it is impossible

to anticipate where wines labelled with the First Applicant’s

distinctive logo and trade mark would be offered for sale as a

result of the intended actions of the First Respondent in

future. Mr. Ntshangase stressed that the First Respondent

intends to proceed with its actions of distributing wines

containing the offending labels to the marketplace. These

actions of the First Respondent will in due course complete

the process of destruction of the good name and reputation

attaching to the trade mark built up so carefully over time,

concluded Mr. Ntshangase in this regard.

(19) Mr. Ntshangase averred that he gave an undertaking to the to

the First Respondent that he would honour his obligations

under the agreement to purchase the existing quantity of

wines bottled and labelled at the instance of the First

Applicant. He stated that in any event the First Respondent

had adequate security for these wines being sold in that once

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wine is bought by Mr. Ntshangase from the First Respondent,

an irrevocable letter of credit can simply be obtained from the

Land Bank in terms of the credit facility provided by the Land

Bank in the sum of approximately R8, 5 million. He is of the

view that the balance of convenience favours the Applicants.

Refuting the suggestion by the First Respondent’s attorneys

about the existence and breach of an agreement by himself,

Mr. Ntshangase stated:

“At no stage did the parties come to any arrangement as to

specific quantities of wine which had to be delivered and

purchased by myself at any specific dates. For obvious

reasons it was not possible to determine the exact quantities

and dates for the delivery of wine.”

Mr. Ntshangase re-iterated that the only agreement in

existence requires of the First Respondent to keep in storage

the wines until such time as delivery is required.

THE RESPONDENTS’ CASE

(20) The Opposing Affidavit on behalf of the First Respondent was

deposed to by one Kenneth John Sheppard, its chief executive

officer. According to Mr. Sheppard the first Applicant,

represented by the Second Applicant, and the First

Respondent represented by Mr. Sheppard himself, entered

into the agreement in the same terms as averred by the

Second Applicant but subject to the proviso that the whole

quantity of wine bottled and labelled by the First Respondent

for the First Applicant would be ordered by the First Applicant

within a year after the said wine was bottled. According to Mr.

Sheppard contrary to the aforesaid proviso after

approximately two and half years since the wine was bottled

for the First Applicant, the First Respondent was still in

possession of a vast number of bottles of Sauvignon Blanc and

Cabernet/Merlot wine, some labelled and some unlabelled,

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awaiting the confirmation of orders from the First Applicant for

shipment thereof. In support of this contention Mr. Sheppard

referred the Court to an e-mail dated 29 January 2004

(marked “1”).In this e-mail Mr. Sheppard expressed some

concerns about the progress with the First respondent’s wines

particularly those bottled for the First Applicant but which

were allegedly still in stock in bulk. In this e-mail Mr. Sheppard

also conveyed the following to the Second applicant:

“We will therefore have to hold you liable for the full costs

should we have to pull the corks and decant the wine. The

only other alternative for us would be for us to find a buyer on

the local market at a substantially discounted price to cover

our costs and get rid of it this way.”

(21) This e-mail further refers to a meeting Mr. Sheppard and Mr.

Ntshangase would have had regarding these wines wherein

the latter would have told the former to draw up an invoice for

all the bottled stocks on hand and forward same to him. An

allegation is made in the e-mail that Mr. Ntshangase would

liaise with the Land Bank in order to arrange a guarantee for

the full amount. Mr. Sheppard averred in the e-mail that Mr.

Ntshangase never reverted back to him in this regard.

Mr. Sheppard averred further that on 10 February 2004 he

forwarded a second e-mail to the Second Applicant which

read:

“I have heard nothing from you regarding my previous e-mail

dated 29 January regarding the Thabani wines stocks that we

still hold….. We are going to have to look at alternative ways

of recovering our investment in the very near future as we

cannot continue to hold this stock at our cost. In addition, I

have a potential buyer for the 2003 Sauvignon Blanc and

unless I hear from you to the contrary before lunch tomorrow I

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am going to go ahead and offer this wines to the

buyer…………..”

(22) According to Mr. Sheppard the aforesaid e-mail resulted in the

discussions between the First applicant and the First

Respondent represented by the Second Applicant and Mr.

Sheppard himself respectively. This discussion culminated to

an agreement (“the second agreement”). The terms of the

second agreement were that:

i) First Applicant would remove and pay for all the stock,

labelled and unlabelled within four (4) weeks counted

from 13 February 2004;

ii) Any stock remaining after the expiry of the four (4)

week period would be sold by the First respondent to

defray the costs;

iii) First Respondent would offer any remaining stock to the

trade at whatever price it could get for it.

(23) Mr. Sheppard averred further that subsequent to the

conclusion of the second agreement he sent an e-mail to the

Second applicant confirming the agreement. Mr. Sheppard

contended that the Second Applicant received the said e-mail

but did not dispute the correctness of the contents thereof.

According to Mr. Sheppard the Applicants did not remove and

pay for any of the remaining stock despite the terms of the

second agreement. The consequence was thus that the

Second respondent on behalf of the First respondent then sold

the stock for the best price to one Mr. Neels Truter in

compliance with the second agreement. Mr. Sheppard

contended further that the sale was a once-off transaction the

purpose being to get rid of the wines.

(24) Save for denying that the Applicants are entitled to be granted

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an interdict against the First and Second Respondents, Mr.

Sheppard does admit the allegations contained in paragraphs

1 to 9 of the founding affidavit. There is also no dispute on

other allegations made in connection with the copyright

relative to the labelling and the fact that the Second Applicant

is the exclusive licensee for use of the logo in the trade. Mr.

Sheppard, however, denied that the First and Second

Respondents had no right to use the trademark or the

copyright material in the label for any purpose other than to

deliver bottled and labelled wines in terms of the arrangement

between the First Applicant and the First Respondent. Mr.

Sheppard in disputing the above relied on the second

agreement which, according to him, entitled the First

Respondent to sell the remaining stock to a third party.

(25) Mr. Sheppard admitted the receipt of the letter from the

Second Applicant’s attorneys (marked “JN11”) but averred

that the First Respondent was not entitled to an undertaking

because there existed the second agreement. It was admitted

by Mr. Sheppard that the First Respondent distributed bottles

of the First applicant’s wine to the marketplace and that such

wines contained labels of the First applicant. In Mr. Sheppard’s

view the First Respondent did all this on the strength of the

second agreement.

THE REPLYING AFFIDAVIT

(26) Mr. Ntshangase in reply denied that there was an agreement

to the effect that the whole quantity of wine bottled and

labelled by the first Respondent for the First applicant would

be ordered by the latter within a year after the wine was

bottled. Mr. Ntshangase stated categorically that the parties

never agreed as to the time period within which the wine had

to be ordered or sold. He re-iterated that it was a clear term of

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the agreement that the First Respondent would not sell the

wine bottled for the First Applicant to any party other than the

First Applicant. Mr. Ntshangase admitted that he received the

e-mail of 29 January 2004 to which Mr. Sheppard referred but

that he took the view that Mr. Sheppard was merely

concerned about the ageing of the wine expressed in the e-

mail and that such ageing was at the very least overstated

and at worst not justified.

(27) Mr. Ntshangase totally denied that he was liable to provide an

invoice for the entire quantity of wine without receiving any

orders from the retail or the wholesale market. He re-iterated

that the agreement was that he would be liable to purchase

wines for which he received orders in the marketplace. He,

however, admitted that he undertook to approach the Land

Bank with the request to provide a guarantee for the full

outstanding amount of the purchase price of the wines as a

solution to what he called the looming dispute between the

parties. Mr. Ntshangase denied that he did not respond to the

aforementioned e-mail. According to him he was in constant

telephonic contact with Mr. Sheppard.

(28) Mr. Ntshangase admitted that he attended a meeting on 13

February 2004 but he emphatically denied that there was any

agreement reached in the terms mentioned by Mr. Sheppard.

According to Mr. Ntshangase there was therefore no second

agreement between the First Applicant and the First

Respondent. Mr. Ntshangase further averred that he received

a copy of an e-mail on 16 February 2004 which enumerated

certain points which were indeed discussed but there was no

agreement concluded on those points at all. It is correct, that

Mr. Sheppard in the meeting of 13th February 2004 expressed

the desire for the outcome set out in this e-mail but Mr.

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Ntshangase on the other hand pointed out that the parties

had a different arrangement.

(29) Whilst Mr. Ntshangase did not dispute the correctness of the

content of the e-mail insofar as they set out the First

Respondent’s position, he, however, denied that it was agreed

(expressly or tacitly) that such contents had to become an

agreement between the parties. Mr. Ntshangase averred that

the First Respondent was indeed putting pressure on him

because the wine (understandably) was not moving in the

marketplace at the rate that the parties had hoped for or as

anticipated.

(30) It was established that Aroma Drop Inn branches had obtained

Thabani wines from the Third Respondent and the latter had

in turn bought the wines from the First Respondent. A copy of

a telefax (marked “A”) from Sands Traders and Exporters

shows that these wines were offered to them “via Neels

Truter” and in turn Sands Traders CC offered the wines to

Aroma Drop Inn. Mr. Ntshangase commenting on this illegal

apparent free flow of the Thabani Wines caused by the First

Respondent stated as follows:

“It had at all times been made clear to the Respondents that

the Applicants were concerned about its reputation in the

marketplace, and about the price received for wines. This was

the main reason why there was a provision in the agreement

between the parties that wines would not be sold to any party

other than the Applicants.”

Mr. Ntshangase remarked that it was strange that the First

Respondent in their letter in response to the letter written by

the First Applicant’s attorneys, never mentioned and/or even

referred to any “second agreement”. According to Mr.

Ntshangase the Applicants fear that there remains a

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significant danger that the Respondents may sell the wines to

parties other than the Applicants. He emphatically denied that

the Applicants knew that the remaining wines would be sold

by the Respondents to parties other than the Applicants.

CONSIDERATION OF THE ISSUES BETWEEN THE PARTIES

(31) On behalf of the Respondents it was submitted by Mr.

MacWilliams that the applicants relied for the relief sought on

an alleged infringement of the second applicant’s trade mark

in terms of Section 34 of the Trade Marks Act, No. 194 of 1993

(“the Trade Marks Act”).

This contention is indeed true regard being had on the

contents of paragraphs 51, 52, 54, 55, 56, 57, 58, 59, 60 and

61 of the founding affidavit filed in support of the Applicants’

application. However, Section 34(2) (d) of the trade Marks Act

makes provision that the registered trade mark is not

infringed by the sale or offering for sale in the Republic of

South Africa of goods, to which the trade mark has been

applied with the consent of the proprietor thereof. It is

common cause in these proceedings that the Applicants

consented to the trade mark being applied to the wine bottled

and labelled with the trade mark and logo, for resale. The

Applicants have wisely, in my view, abandoned reliance on the

infringement in terms of Section 34 of the Trade Marks Act.

This position is clearly demonstrated in the heads of

arguments filed on behalf of the Applicants as well as from the

oral submissions made before me on 24 February 2005.

(32) It was further submitted on behalf of the Respondents that the

Applicants did not base their application for the relief sought

against the Respondents on the alleged breach of contract. In

support of this submission I was referred to Swissborough

Diamond Mines v Government of the RSA 1999(2) SA 279

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(T) on 323G - 324A where the Court stated the following:

“It is trite law in motion proceedings the affidavits serve not

only to place evidence before the Court but also to define the

issues between the parties. In so doing the issues between

the parties are identified. This is not only for the benefit of the

court but also, and primarily, for the parties. The parties must

know the case that must be met and in respect of which they

must adduce evidence in the affidavits. In Hart v Pinetown

Drive Inn Cinema (Pty) Ltd. 1972(1) SA 464(D) it was

stated at 469 C-E that:

‘Where proceedings are brought by way of application, the

petition is not the equivalent of the declaration in proceedings

by way of action. What might be sufficient in a declaration to

foil an exception, would not necessarily, in a petition, be

sufficient to resist an objection that a case has not been

adequately made out. The petition takes the place not only of

the declaration, but also of the essential evidence which

would be led at a trial and if there are absent from the

petition such facts as would be necessary for determination of

the issue, in the petitioner’s favour, an objection that it does

not support the relief claimed is sound.’

An applicant must accordingly raise the issues upon which it

would seek to rely in the founding affidavit. It must do so by

defining the relevant issues and by setting out the evidence

upon which it relies to discharge the onus of proof resting on

it in respect thereof.”

(33) I fully associate myself with the above reasoned sentiments.

This is indeed the true statement of our law in this regard. But

in the instant matter the Applicants also relied heavily on the

agreement concluded between the First Applicant and the

First Respondent. This agreement is dealt with quite

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extensively in the founding affidavit filed in support of this

application. Interestingly the First Respondent does not deny

the existence of the said agreement save for averring that

there was a second agreement reached between the parties.

The terms of the agreement relied on by the applicants

allegedly breached by the First Respondent, are well

documented in the founding affidavit. Strangely the First

Respondent apart from not denying the existence of such

agreement went further and set out in its Answering Affidavit

the terms of such an agreement. The terms as set out by the

First Respondent in the answering affidavit are materially

similar to the terms set out by the Applicants in the founding

affidavit. It cannot, therefore, in my view be contended that

the Applicants have so failed to define the issues between the

parties such that the Respondents have been precluded from

knowing what the issues are between them and the

Applicants. In my view the Applicants have in the founding

affidavit demonstrated sufficiently that it sought to place

reliance on the breach of agreement between the parties

apart from relying on the provisions of Section 34 of the Trade

Marks Act (the latter reliance was abandoned by the

Applicants in the argument of this matter).

(34) It was submitted on behalf of the Respondents that the

Applicants have not asked for any factual disputes to be

referred for oral evidence as provided for by Rule 6(5) (g).

According to the last submission made on behalf of the

respondents, the latter had in any event sold the remaining

wine, bearing the Second Applicant’s trade mark during a

once-off transaction and with no other purpose than to get rid

of the remaining wines. It is contended that it was never the

intention of the First and/or the Second Respondent to

distribute wine containing the trade mark and logo of the

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Second Applicant, other than in terms of the second

agreement. I intend to deal fully with the above submissions

later on in this judgment.

(35) The Respondents contended that there was a second

agreement concluded between the parties. In terms of the

said second agreement, the First Applicant would purchase all

the wines within four (4) weeks from the date of that

agreement, failing which all the stock would be sold at a price

that the First Respondent could get for it. The Applicants

dispute the existence of the second agreement. The

Applicants contend that what the Respondents now call the

second agreement was in fact a proposal put on the table by

the First Respondent. These proposals were, however, never

accepted by the Applicants. According to the Applicants the

Respondents were merely assured that the former would

continue to remove wine on order in terms of the original

agreement. The parties according to the Applicants hoped

that this would resolve the problem in due course.

(36) The second agreement was allegedly concluded on 13

February 2004. Despite the provision contained in the

disputed second agreement that wines not removed within

four (4) weeks calculated as at the date of the agreement,

strangely no wines appear to have been sold into the

marketplace until October 2004. The question that comes to

mind is even if the second agreement existed, were the

Respondents still acting in terms of the said agreement when

they sold/released the wines into the marketplace in October

2004? Calculation shows that from 13 February 2004 to

October 2004 a period of approximately five (5) months had

gone past. I do not have the benefit of a written agreement.

The e-mail which the First Respondent sent to the Second

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Applicant purporting to record the terms of the second

agreement read as follows:

“I would like to confirm below the points discussed………………

As discussed you will remove and pay for all this stock,

labelled and unlabelled, within the next four (4) weeks. Any

stock remaining after this date will be sold by us to defray the

costs already incurred by us on your behalf. We will have to

offer this wine to the trade at whatever price we can get for

it.”

The e-mail does not mention that there was any agreement

reached. It merely refers to the discussions. This is probably a

question of interpretation. But the fact remains that this e-

mail says nothing to be construed as an agreement concluded

between the parties.

(37) It is common cause that the Applicants caused a letter of

demand to be sent out to the Respondents. It is equally

common cause that the Respondents responded by writing a

letter. The Respondents’ letter mentions nothing about the

second agreement. From their letter it is apparent that they

relied on a breach of the original agreement. They also relied

on the right they had to sell the wines in terms of the original

agreement. In motion proceedings such as the present

dispute may arise but a bare denial of the Applicant’s version

does not create a genuine dispute of fact, nor does a version

which is far-fetched or clearly untenable (See cases such as

Room Hire Co. (Pty) Ltd v Jeppe Street Mansions (Pty)

Ltd 1949 (3) SA 1155 (T); Plascon-Evans Paints Ltd v Van

Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 AD etc.). Indeed

a Court is not permitted to decide the matter on a mere

balance of probabilities where there are genuine or real

disputes of fact on material issues. In the case of disputes of

fact, an applicant can only succeed if the facts as stated by

21

the respondent, together with those facts in the applicant’s

affidavit which have been admitted by the respondent, justify

the order sought. The matter is, in other words, essentially

decided on the respondent’s version. This has come to be

known as the Plascon-Evans approach. It is trite law that in

certain suitable cases the Court will adopt a “robust, common

sense approach” to the dispute of fact. However, it is our law

that, where the court is unable to decide the application on

papers there are three (3) avenues open to it, namely:

i) It may dismiss the application;

ii) It may refer the application for the hearing of oral

evidence;

iii) It may refer the application to trial.

In my view there is no genuine or real dispute of facts in this

matter. There is therefore no necessity for the referral of this

matter for hearing of oral evidence nor is it necessary to refer

this application to trial. The existence of the second

agreement is nothing but a clear after-thought on the part of

the First Respondent. From the First Respondent’s version it is

more than apparent that the issues raised in his e-mail were

but issues which were purely the subject of discussion

between the parties. In other words these issues “discussed”

had not yet crystallized into an agreed set of issues at all. The

First Respondent itself is very careful and does not in the e-

mail refer to the issues as “agreed” or “in terms of the second

agreement”. The silence in the Respondent’s response to the

letter of demand, with regard to the existence of the second

agreement speaks louder than words. That response actually

says there was never any second agreement.

(38) Turning to Mr. MacWilliams’ last submission, the question that

comes to mind is how are the Applicants to know for a fact

that the wines complained of were sold to the open market in

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a once-off transaction by the First Respondent? How are the

Applicants to know what the First Respondent intended?

Experience tells us that once trust has been corroded between

the two (2) corporate entities, each entity ordinarily tends to

be suspicious of the other. It would therefore in my view not

be unreasonable for the Applicants to take steps to safeguard

their business interests under such circumstances. It would

also be unfair and unreasonable to expect that the Applicants

under such circumstances would not have an apprehension of

irreparable harm for their business interests.

(39) In order to succeed the Applicants must make out a case

which:

i) Makes out a prima facie case even though open to some

doubt.

ii) Demonstrates that the balance of convenience favours

the Applicants.

iii) Demonstrates that there is no alternative remedy for

the Applicants to achieve the same result.

See Webster v Mitchell 1948(2) SA 1186 at 1189

Gool v Minister of Justice and Another 1955(2) SA 682 C

at 688 A-E; Director of Education v Wilkinson 1930 TPD

471 at 492.

(40) It is my view that regard being had to the evidence and

circumstances attendant to this matter, the Applicants have

indeed made out a strong prima facie case, even if same may

be perceived to be open to some doubt, that they have a right

in terms of their contract with the First Respondent, to restrain

the latter from selling the wines into the marketplace.

(41) Paragraphs 55 to 67 of the founding affidavit deal extensively

with the Applicants’ contention that they will suffer irreparable

23

harm and that they are being favoured by the balance of

convenience. In response the Respondents have chosen not to

deny these allegations. The Respondents have instead chosen

to allege that all the wines have been lawfully disposed of by

them in terms of the second agreement. The First Respondent

admittedly still have an unspecified quantity of wine of the

First Applicant in its possession. In this regard Mr. Rautenbach

contended on behalf of the Applicants that in essence the

latter will suffer irreparable prejudice in that its brand,

residing in the trade mark and logo of “Thabani Wines”, will

irreparably be destroyed in that its character and reputation

as an upmarket brand representing wines selling for

approximately R50 per bottle on the shelf, will permanently be

destroyed. Such harm, in Mr. Rautenbach’s view, would be

irreparable because there is and cannot be any suggestion

that a carefully nurtured and built-up brand such as that of the

Applicants could be restored and repaired in any meaningful

way. In the Applicants’ case adequate security exists in favour

of the First Respondent for as long as the wine is bought by

them. In terms of the original agreement the terms of which

are not disputed by the Respondents as long as the Applicants

order the wine and remove it, the Respondents will be paid for

it as agreed.

Mr. Rautenbach finally submitted that there is no suggestion

on the part of the Respondents that they would suffer

irreparable harm simply because they may have to wait to be

paid their money over a longer period, longer than had

previously been anticipated by them or, for that matter, both

parties.

(41) In making a determination in the above regard, I will ordinarily

also be guided by the remarks made by Stegman J in Knox

D’Arcy Ltd. And Others v Jamieson and Others 1996(4)

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SA 348(A) at 603 G – 604 A:

“In the very nature of things the temporary regulation of the

situation often denies to both disputants the enjoyment of the

full extent of the rights claimed by each of them respectively.

When the dispute is finally determined by the decision of a

Court it can then be seen that the successful party suffered a

truncation of his rights during the period that the dispute and

decision were pending and were regulated by the

interlocutory interdict. Inevitably that period of the truncation

of the rights of the ultimately successful party is irreversible

and to that extent final. However, that is not in itself a

sufficient reason for refraining from making an interlocutory

order or for treating interlocutory relief as if it were final

relief.”

I am fully in agreement with these illusive observations made

by Stegman J.

(42) It is very clear that the original agreement between the

parties was tailored such that it fully protected the character

and reputation of the wines branded and labelled “Thabani

wines”. This protection ensured that these “Thabani Wines”

remain upmarket brand destined to achieve only the highest

price determined according to its quality. This protection was

to be lost certainly if the Respondents were to be allowed to

escape their liabilities under the contract purely because the

bargain in which they had entered into did not appear to be

such a commercial success as they might have hoped for at

the onset. The parties are bound by their agreements. In any

event, the relief sought in these proceedings is of an interim

nature. That by its very nature enables the parties to fully and

finally exhaust the remedies they may have at the second

stage of the proceedings.

It is my view that the balance of convenience in the instant

25

matter favours the Applicants. That there is a well-grounded

apprehension of irreparable harm to the Applicants cannot be

doubted at all in the circumstances of this matter.

COSTS

(43) The general rule is that a successful party is entitled to its

costs. In the instant matter there is no justification for

departing from this rule.

ORDER(44) In the circumstances I make the following order:

Pending the final resolution of an action instituted by the

Applicants against the Respondents in case number

1708/2005 for damages and other reliefs a Rule Nisi is granted

in the following terms:

a) Interdicting and restraining the Respondents from using in the

course of trade in relation to goods and services in respect of

which the Second Applicant’s trade mark “Thabani Vineyards

and Winery” (“the trade mark”) is registered, a mark or marks

which are identical to the trade mark and/or logo in annexure

“A” or a mark or logo so nearly resembling the trade mark or

logo as to be likely to deceive or cause confusion.

b) It is ordered and directed that the Respondents are immediately

to discontinue the use of the trade mark or log and any labels

and other packaging material in respect of wines containing the

trade mark Thabani or any derivative, or the logo in annexure

“A”, other than to deliver wines bottled and labelled at the

specific instance and request of the First Applicant.

c) It is ordered that the Respondents are hereby restrained from

selling or distributing bottles or other containers of wines

containing the trade name and/or logo to any party other than

26

the First Applicant.

d) The Respondents are to pay the Applicants’ costs jointly and

severally.

____________________

DLODLO, J

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