THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

JUDGMENT

Case No: 530/09

In the matter between:

CADAC (PTY) LTD

Appellant

and

WEBER STEPHEN PRODUCTS COMPANY

First Respondent

GALACTEX OUTDOOR (PTY) LIMITED

Second Respondent

THE MINISTER OF SAFETY & SECURITY

Third Respondent

THE REGISTRAR OF TRADEMARKS

Fourth Respondent

Neutral citation:  Cadac v Weber-Stephen (530/09) [2010] ZASCA 105 (16
September 2010)

Coram:
Harms DP, Nugent, Ponnan and Shongwe JJA and R Pillay AJA
Heard:
03 September 2010

Delivered:
16 September 2010

Summary:
Civil procedure – inquiry into damages  – sought in motion proceedings
– Counterfeit Goods Act 37 of 1997 s 10(1) and 17(1) – Prescription Act 68 of 1969
s 15.

___________________________________________________________________

ORDER
___________________________________________________________________

On appeal from: South Gauteng High Court (Johannesburg) (Brett AJ sitting as
court of first instance):
The appeal is upheld with costs, including the costs of two counsel.
The order of the court below is set aside and replaced with an order in these

terms:

(a)
The interlocutory application is upheld with costs, including the costs of

two counsel.

(b)
The counter-application is dismissed with costs, including the costs of

two counsel.

(c)
The Registrar of the South Gauteng High Court is directed to fix a date

for an inquiry to be conducted by way of a High Court trial for the

purposes of:-
(i)
the determination of the amount of compensation to be

paid by the Respondents to the Applicant as contemplated in

section 10(1)(c) of the Counterfeit Goods Act 37 of 1997;

and
(ii)
the payment by the Respondents, jointly and severally, the one
paying the others to be absolved, to the Applicant of the amount
of compensation found to be due to the Applicant pursuant to
the determination, together with interest on such amount at the
prescribed rate of interest from the date of such determination
until the date of payment and the costs of the determination.

(d)
The Applicant shall within 20 (twenty) days of the date of this order

serve upon the Respondents and file a declaration particularizing the

damages allegedly suffered by it as a result of the seizure of its goods

under  the search and seizure warrant issued on 10 December 2004.

(e)
The Respondents, if so advised, shall with 10 (ten) days of the service

of the Applicant’s declaration, file a plea thereto.

(f)
The Uniform Rules of Court relating to discovery, inspection and all

other matters of procedure shall apply to the determination.

(g)
The parties are authorised, on notice to the other parties and should it

be required by one or both of them, to make application to the South

Gauteng High Court to add to, or vary the above order so as to

facilitate the conducting of the determination and generally to make

application for further directions in regard thereto.
___________________________________________________________________
JUDGMENT
___________________________________________________________________

HARMS DP (NUGENT, PONNAN and SHONGWE JJA and R PILLAY AJA
concurring)

INTRODUCTION
[1] The first respondent, Weber-Stephen Products Co, a US company, is the
registered owner of trademarks that relate to the shape and configuration of
barbeque kettle grills. Its sole distributor in South Africa is the second respondent,
Galactex Outdoor (Pty) Ltd. The appellant, Cadac (Pty) Ltd, also manufactures kettle
grills and had a kettle grill on the local market for some 18 months when it decided to
introduce another model during November 2004.1
[2] This gave rise to correspondence between the parties in which the
respondents (to whom I shall simply refer as Weber-Stephen) alleged trademark
infringement, something Cadac denied. Weber-Stephen then alleged that Cadac
was guilty of counterfeiting and threatened to lay a charge under the Counterfeit
Goods Act 37 of 1997. In spite of Cadac’s detailed refutation of the allegations the
respondents proceeded to lay a complaint without notice to Cadac in terms of s 3 of
the Act by means of an affidavit and without disclosing the fact that Cadac had
asked for notice and had provided it with a detailed defence.
[3] An inspector appointed under the Act, acting on the correctness of the
allegations in the affidavit, applied for a warrant from a magistrate in chambers

1 The third and fourth respondents were inappropriately cited for purposes of the appeal.

authorising him to seize Cadac’s kettle grills (s 6(1)). The warrant was executed
during the Christmas season and kettle grills in the possession of dealers were also
confiscated. Cadac alleges that it suffered some loss as a result.
[4] On 13 January 2005 Cadac applied on an urgent basis for a setting aside of
the warrant in the light of the underhand manner in which it had been obtained. It
also applied for a declaration that the goods seized were not counterfeit and for an
inquiry into damages and for costs.
[5] The application was heard by Schwartzman J on 25 February, and in a fully
reasoned judgment of 18 March he came to the conclusion that the warrant had
been obtained irregularly and he set it aside with costs and ordered the return of
Cadac’s goods.2 Weber-Stephen sought leave to appeal from the learned judge and
from this court but without success.
[6] Because of this finding the learned judge thought it unnecessary to express
any view about whether or not the Cadac product was counterfeit. This he did in
spite of the fact that
‘the striking feature about counterfeit cases is that they are legally very simple: they do not
involve serious disputes over the boundaries of the trademark owner’s rights. In mimicking
the goods and the trademarks, the conduct of counterfeiters clearly falls within the ambit of
conduct that a trademark owner is entitled to prevent.’3
Counterfeiting involves deliberate and fraudulent infringement of trademarks4 and
‘counterfeit cases involve an infringer attempting to reproduce – and substitute for –
the goods (not just the trademark) of the trademark owner.’5 That is why the Act is
concerned with trademark and copyright infringements that are criminal in nature.
The Act does not permit a rights holder to steal a march on an alleged infringer in
order to settle a bona fide dispute about the boundaries of rights. Those disputes
should be litigated under either the Trade Marks Act or the Copyright Act.6

2 The judgment has been reported: Cadac (Pty) Ltd v Weber-Stephen Products Co 2005 Burrell’s IP
439 (W).
3 Jason Bosland, Kimberlee Weatherall and Paul Jensen ‘Trademark and counterfeit litigation in
Australia’ at www.law.unimelb.edu.au/ipria/publications/workingpapers.html.
4 R v Johnstone [2003] UKHL 28.
5 Ibid.
6 Trademarks that relate to shape and configuration have their own peculiar problems: Die Bergkelder
Bpk v Vredendal Koöp Wynmakery 2006 (4) SA 275 (SCA) para 8.

[7] The prayer relating to an inquiry into damages flowed from the provisions of s
17(1) of the Act, which provides that any person suffering damage or loss caused by
the wrongful seizure, removal or detention of goods alleged to be counterfeit is
entitled to claim compensation from the complainant for that damage or loss. This
must be read with s 10(1)(c) which states, inter alia, that a court ‘in any civil or
criminal proceedings relating to counterfeit goods’ may order
‘that the complainant pays damages, in an amount determined by the court, to the person
from whom those goods were seized and pays that person’s costs.’
[8] The court postponed this prayer sine die. For reasons that are not now
germane Cadac did not take further formal steps in relation to the inquiry into
damages until three years and two days after the judgment of Schwartzman J when
it applied by means of an interlocutory application for directions for the conduct of
the inquiry, something not regulated by any court rule. The crux of Weber-Stephen’s
answer was a multi-faceted reliance on prescription (in some instances somewhat of
a misnomer) and a counter application for an order declaring that Cadac’s claim had
become prescribed. Not all were persisted in during the appeal.
[9] One of these arguments was based on the fact that Schwartzman J did not
deal with the question whether or not the goods were counterfeit. Weber-Stephen
argued in the court below that the provisions of s 10(1)(c) and s 17(1) in those
circumstances did not provide a cause of action for the recovery of damages. The
cause of action, according to the submission, was dependent on a finding that the
goods were not counterfeit. Brett AJ dismissed the argument and Weber-Stephen
did not attempt to revive it in this court. It does not appear from the papers that
Weber-Stephen has instituted any trademark infringement proceedings against
Cadac.
INQUIRY INTO DAMAGES: IS IT PERMITTED?
[10] The first issue to decide is whether the proceedings launched by Cadac for an
inquiry into damages is competent because, as was argued by Weber-Stephen, it is
not at all permissible to bring an illiquid claim by means of motion proceedings. This
much was said by Murray AJP in Room Hire.7 The main reason for the statement is
in general terms unobjectionable. It is that motion proceedings are not geared to

7 Room Hire Co (Pty) Ltd v Jeppe Street Mansions (Pty) Ltd 1949 (3) SA 1155 (T).

deal with factual disputes – they are principally for the resolution of legal issues8 –
and illiquid claims by their very nature involve the resolution of factual issues. The
related reason concerns the lack of pleadings.9 The other objection, namely that
motion proceedings give the applicant a procedural advantage because the
respondent is not entitled to rely on a bald denial as is possible in trial proceedings
and that it would be unfair to deprive the respondent of this advantage, no longer
holds water.10 Litigation is not a game.
[11] The fact of the matter is that Cadac does not seek to have its illiquid claim
decided by means of motion proceedings and that these objections have no bearing
on the matter. What it does seek are directions as how to proceed with the
quantification of its claim for damages to which it is entitled by virtue of the statute
and the findings by Schwartzman J.11 The irony of the objection is that if it had
proceeded by way of application for an interdict based on trademark infringement,
Weber-Stephen, if successful, would have been entitled to an order directing an
inquiry into damages and directions as to the procedures to be followed.12 But since
the proceedings by Cadac are not trademark infringement by a quirk of somewhat
ossified procedural law the same procedure is said not to be available.
[12] Courts have refused to make orders for an inquiry into damages because the
relief, which is found in English procedural law, is not dealt with in our court rules.13
But, as Nicholas J pointed out in Harvey Tiling,14 such orders have been granted
without objection in patent actions at a time when there was no available local rule.
And, as he showed, courts are able to craft an appropriate order for an inquiry into
damages without the need for a rule. One finds regularly that parties agree or courts
order that issues concerning liability are to be decided first and quantum thereafter.
But the present rigid system requires of a plaintiff to particularize its damages when

8 National Director of Public Prosecutions v Zuma 2009 (2) SA 277 (SCA) para 26.
9 Montres Rolex SA v Kleynhans 1985 (1) SA 55 (C) 70B.
10 Williams v Tunsdall  1949 (3) SA 835 (T) 839.
11 The notice of motion was for an order directing an inquiry into the damages due to Cadac, a
direction in relation to the procedure to be followed, an order that the respondents pay those
damages, and an order in relation to interest.
12 Trade Marks Act 194 of 1993 s 34(4).
13 Atlas Organic Fertilisers (Pty) Ltd v Pikkewyn Ghwano (Pty) Ltd 1978 (4) SA 696 (T); Montres
Rolex SA v Kleynhans loc cit; Atlas Organic Fertilisers (Pty) Ltd v Pikkewyn Ghwano (Pty) Ltd 1978
(4) SA 696 (T); Haggar Co v SA Tailorcraft (Pty) Ltd 1985 (4) SA 569 (T) 582A-C.
14 Harvey Tiling Co (Pty) Ltd v Rodomac (Pty) Ltd 1977 (1) SA 316 (T) 328-330.

instituting action, sometimes a costly exercise which may prove to have been
unnecessary.
[13] I cannot see any objection why, as a matter of principle and in a particular
case, a plaintiff who wishes to have the issue of liability decided before embarking
on quantification, may not claim a declaratory order to the effect that the defendant
is liable, and pray for an order that the quantification stand over for later
adjudication. It works in intellectual property cases albeit because of specific
legislation but in the light of a court’s inherent jurisdiction to regulate its own process
in the interests of justice – a power derived from common law and now entrenched
in the Constitution (s 173) – I can see no justification for refusing to extend the
practice to other cases. The plaintiff may run a risk if it decides to follow this route
because of the court’s discretion in relation to interest orders. It might find that
interest is only to run from the date when the debtor was able to assess the quantum
of the claim.15 Another risk is that a court may conclude that the issues of liability
and quantum are so interlinked that it is unable to decide the one without the other.
[14] Once the principle is accepted for trial actions there is no reason why it
cannot apply to application proceeding. In Modderklip,16 which was brought on
notice of motion, this court issued an order for the determination of the quantum of
damages based on the formulation used in Harvey Tiling. The order of the
Constitutional Court was in this regard identical.17 The fact that the order related to
‘constitutional’ damages does not affect the procedural principle.
[15] There is, without derogating from the foregoing, an additional reason why the
procedure is permissible in this case. Section 10 of the Act provides that an order for
damages may be ordered against a complainant ‘in any civil or criminal proceedings
relating to counterfeit goods’. Cadac’s application to set aside the warrant was such
a proceeding within the meaning of the section, which does not require separate
proceedings for the determination of quantum. In the absence of rules regulating
these quantification proceedings a court has to prescribe an appropriate procedure.

15 Prescribed Rate of Interest Act, 1975 s 4 read with s 2A(5).
16 Modderfontein Squatters, Greater Benoni City Council v Modderklip Boerdery (Pty) Ltd (Agri SA
and Legal Resources Centre, amici curiae) 2004 (6) SA 40 (SCA).
17 President of the RSA v Modderklip Boerdery (Pty) Ltd (Agri SA and others amici curiae) 2005 (5)
SA 3 (CC).

THE CAUSA OF CADAC’S CLAIM
[16] The issue relating to the nature of Cadac’s claim arises from Weber-
Stephen’s argument that at the time that the main application was launched the right
to damages had not yet accrued and that the proceedings for the recovery of
damages (albeit in the form of an inquiry into damages) were accordingly premature.
This argument was based on the supposition that the warrant was not void but
voidable and that a cause of action for wrongful attachment of goods could only
arise once the warrant has been set aside – until then it remains valid. As was said
by Trollip JA, until a warrant like the one in the instant case is set aside ‘it continues
to have the effect of justifying the proposed attachment [citations omitted] and,
without more, the appellant cannot obtain the interdict it seeks.’18
[17] The learned judge was concerned with an application for an interdict to
prevent the police from attaching certain gambling machines. The police in answer
relied on a warrant issued by a magistrate. The application, the judge said, could not
be regarded or treated as including a claim to have the warrant set aside because
there was not a timely attack on its validity (the attack, it would appear, came in the
replying affidavit). Without such a claim the interdict could not be granted. This
means that the interdict could have been granted if in the same proceedings the
there was a prayer, which was successful, for the setting aside of the warrant.
[18] The cause of action for an interdict and one for damages are the same. Only
the nature of the relief differs. And although there are statements in cases that
damages can only be sought after a warrant had been set aside, those statements
must be read in context. They dealt with the distinction between malicious
attachments and wrongful ones. Because a writ is a defence against a claim based
on the former the claim cannot succeed unless the writ is set aside.19 To anticipate
reliance on a writ by the defendant a plaintiff must include a claim for having it set
aside. Not one ever suggested that two proceedings, one for setting aside and the
next for damages, are required. The reason is apparent. The declaration of invalidity
operates retrospectively and not prospectively. This means that once a warrant is

18 Cresto Machines (Edms) Bpk v Die Afdeling Speuroffisier, SA Polisie, Noord-Transvaal 1972 (1)
SA 376 (A) 395H.
19 Hart v Cohen (1899) 16 SC 363 at 369; Cohen Lazar & Co v Gibbs 1922 TPD 142 at 147-148;
Begeman v Cohen 1927 TPD 674 at 676; Cole’s Estate v Oliver 1938 CPD 465 at 468.

set aside it is assumed that it never existed and everything done pursuant thereto
was consequently unlawful.
[19] I therefore conclude that the claim relating to damages in the application to
set aside the warrant was not premature. The notice of motion was a process
whereby proceedings were instituted as a step in the enforcement of a claim for
payment of a debt.20 This means that the running of prescription was interrupted in
terms of s 15(1) of the Prescription Act 68 of 1969.21
FAILURE TO PROSECUTE THE CLAIM FOR DAMAGES
[20] I have mentioned that Cadac had failed to further prosecute its damages
claim until it launched the present proceedings on 20 March 2008. Because of this
delay Weber-Stephen relied on s 15(2) of the Prescription Act which provides inter
alia that ‘the running of prescription shall not be deemed to have been interrupted, if
the creditor does not successfully prosecute his claim under the process in question
to final judgment.’ The argument was that since Cadac did not prosecute its claim to
a final judgment the claim became prescribed. For this proposition reliance was
placed on the judgment in Chauke.22
[21] The immediate problem with the argument is this: when did the claim
prescribe? Counsel suggested within three years from the judgment of Schwartzman
J, but there is no time limit stated in s 15(2) within which the claim must be
prosecuted with success. It could just as well have been three days, weeks or
months. In any event, Munnik CJ analyzed s 15(2) in Titus23 and came to the
conclusion that Chauke was incorrect. I can do no better than to rely on his
reasoning.  He pointed out, with reference to Kuhn v Kerbel 1957 (3) SA 525 (A), a
case decided under the Prescription Act 18 of 1943, that the Act rendered a right
unenforceable after the lapse of a certain time, but did not purport to deal with the
time within which proceedings had to be concluded. Extinctive prescription, it held,
limits the time within which proceedings must be instituted but once instituted its
continuance is governed by the rules of court. The reason is that while the initiating

20 Cape Town Municipality v Allianz Insurance Co Ltd 1990 (1) SA 311 (C) 334G-J.
21 ‘The running of prescription shall, subject to the provisions of subsection (2), be interrupted by the
service on the debtor of any process whereby the creditor claims payment of the debt.’
22 Chauke v President Insurance Co Ltd 1978 (2) SA 947 (W).
23 Titus v Union & SWA Insurance Co Ltd 1980 (2) SA 701 (TkSC).

step (the issue of process) is within the power of the creditor the subsequent
conduct of the proceedings might not be.24
[22] Munnik CJ further held that the introduction of s 15(2) of the 1969 Act did not
affect this reasoning. He focussed on the word ‘successfully’ and held that only if a
creditor’s claim fails the provision comes into force. The practical effect of this is that,
should absolution be granted, the plaintiff cannot be said to have successfully
prosecuted the claim to final judgment. The same would apply, he said, if an
exception is taken and the plaintiff cannot amend but has to issue a fresh summons
(an unlikely event). Another example appears from a later case where a plaintiff
withdrew the action in one court in order to institute it in another: since the first
summons was not successfully prosecuted it could not interrupt prescription.25
[23] The learned judge concluded (at 704F-H):
‘It is not unreasonable to assume that what the legislator had in mind was the following: It is
necessary that there should be finality in litigation. The plaintiff is given a reasonable time
within which to institute his action, thereafter he is in the hands of the administration of the
Courts. Certain Rules are laid down, time is given in which certain procedures have to be
carried out in regard to the pleadings and there is a general provision in every Rule of Court
in terms whereof the Court can always extend the time and furthermore he has other factors
to contend with . . . which all make it impossible for him to have any direction over the length
or duration of the proceedings once he has instituted them.’
[24] This means that the failure to prosecute did not in the circumstances of this
case lead to the extinction of the claim by prescription. I do not thereby wish to
condone the lackadaisical manner in which Cadac dealt with the matter but, as
Munnik CJ said (at 705A-B), the debtor to a certain extent has a say in the running
of prescription by enforcing the rules of court. In this case Weber-Stephen could
have enrolled the case for dismissal of the postponed relief.
CONCLUSION
[25] This means that Weber-Stephen’s defences to the relief sought were without
merit. The parties are agreed that the following order should issue in that event and
it is ordered as follows:

24 Sieberhagen v Grunow 1957 (3) SA 485 (C).
25 Van der Merwe v Protea Insurance Co Ltd 1982 (1) SA 770 (E).

The appeal is upheld with costs, including the costs of two counsel.
The order of the court below is set aside and replaced with an order in these

terms:

(a)
The interlocutory application is upheld with costs, including the costs of

two counsel.

(b)
The counter-application is dismissed with costs, including the costs of

two counsel.

(c)
The Registrar of the South Gauteng High Court is directed to fix a date

for an inquiry to be conducted by way of a High Court trial for the

purposes of:-
(i)
the determination of the amount of compensation to be

paid by the Respondents to the Applicant as contemplated in

section 10(1)(c) of the Counterfeit Goods Act 37 of 1997;

and
(ii)
the payment by the Respondents, jointly and severally, the one
paying the others to be absolved, to the Applicant of the amount
of compensation found to be due to the Applicant pursuant to
the determination, together with interest on such amount at the
prescribed rate of interest from the date of such determination
until the date of payment and the costs of the determination.

(d)
The Applicant shall within 20 (twenty) days of the date of this order

serve upon the Respondents and file a declaration particularizing the

damages allegedly suffered by it as a result of the seizure of its goods

under  the search and seizure warrant issued on 10 December 2004.

(e)
The Respondents, if so advised, shall with 10 (ten) days of the service

of the Applicant’s declaration, file a plea thereto.

(f)
The Uniform Rules of Court relating to discovery, inspection and all

other matters of procedure shall apply to the determination.

(g)
The parties are authorised, on notice to the other parties and should it

be required by one or both of them, to make application to the South

Gauteng High Court to add to, or vary the above order so as to

facilitate the conducting of the determination and generally to make

application for further directions in regard thereto.

______________________
L T C Harms
Deputy President

APPEARANCES

APPELLANTS:

A J Bester SC (with him N J Tee)

Instructed by D M Kisch Inc, C/o Blake Bester

Attorneys, Rosebank

Rossouws, Bloemfontein

RESPONDENTS:

G E Morley SC (with him A Annandale)

Instructed by Spoor & Fisher Attorneys, C/o

Routledge Modise Moss Morris, Johannesburg

Matsepes Inc, Bloemfontein
THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE
SUPREME COURT OF APPEAL
MEDIA SUMMARY – JUDGMENT DELIVERED IN COURT OF
APPEAL

15 September 2010

STATUS: Immediate

CADAC (PTY) LTD v WEBER STEPHEN PRODUCTS COMPANY &
OTHERS

Please note that the media summary is intended for the benefit of the media and
does not form part of the judgment of the Supreme Court of Appeal

The Supreme Court of Appeal (SCA) upheld an appeal against an order of the South
Gauteng High Court (Johannesburg) and dismissed a counter-application.

The respondents accused the appellant of trademark infringement, which the
appellant denied. The respondents then alleged that the appellant was guilty of
counterfeiting and threatened to lay a charge under the Counterfeit Goods Act 37 of
1997 (The Act). In spite of the appellant’s refutation, the respondents proceeded to
lay a complaint, without notice to the appellant, in terms of s 3 of the Act which led to
a warrant being obtained and executed during the Christmas season, and goods
being seized from dealers, causing the appellant some loss as a result.

The appellant applied to the high court on an urgent basis for the setting aside of the
warrant. It also applied for a declaration that the goods seized were not counterfeit
and for an inquiry into damages and for costs.

The high court held that the warrant had been obtained irregularly and set it aside
with costs and ordered the return of the goods seized. The inquiry into damages
stemmed from the provisions of s 17(1) of the Act, which must be read with s
10(1)(c). The court postponed this prayer sine die.

The first issue for the SCA to decide was whether the proceedings launched by the
appellant for an inquiry into damages were competent, because, the respondents
argued, it is not at all permissible to bring an illiquid claim by means of motion

proceedings. The SCA held that the procedure was permissible as the appellant in
fact did not seek to have its illiquid claim decided by means of motion proceedings,
but merely sought directions as to how to proceed with the quantification of its claim
for damages. The SCA could not see any objection as to why a plaintiff who wishes
to have the issue of liability decided before embarking on quantification, may not
claim a declaratory order to the effect that the defendant is liable, and pray for an
order that the quantification stand over for later adjudication. Additionally s 10 of the
Act provides that an order for damages may be ordered against a complainant ‘in
any civil or criminal proceedings relating to counterfeit goods’. The appellant’s
application to set aside the warrant was such a proceeding within the meaning of the
section, which does not require separate proceedings for determination of quantum.
In the absence of rules regulating these quantification proceedings a court has to
prescribe an appropriate procedure.

The second issue before the court was whether the appellant’s claim was
premature, as the respondents submitted that at the time that the main application
was launched the right to damages had not yet accrued. The SCA held that the
appellant’s claim was not premature, as the notice of motion was a process whereby
proceedings were instituted as a step in the enforcement of a claim for payment of a
debt. This meant that the running of prescription was interrupted in terms of s 15(1)
of the Prescription Act 68 of 1969.

This led to the respondents raising a third issue, namely, that since the appellant did
not prosecute its claim to a final judgment the claim became prescribed, as in terms
of s 15(2) of the Prescription Act ‘the running of prescription shall not be deemed to
have been interrupted, if the creditor does not successfully prosecute his claim
under the process in question to final judgment’. The SCA held that the failure to
prosecute did not in the circumstances of this case lead to the extinction of the claim
by prescription and that the debtor, to a certain extent, has a say in the running of
prescription by enforcing the rules of the court.

---ends---