Trustees OF THE Mukono Family Trust (2) Mukonotronics (Private) Limited V Karpeg Investments (Private) Limited T/a Kadir & SONS

### Preamble
Judgment No. SC 1
45/21
Civil Appeal Case No. 112/18
1
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DISTRIBUTABLE:		(40)

TRUSTEES      OF     THE      MUKONO      FAMILY     TRUST      (2) MUKONOTRONICS     (PRIVATE)      LIMITED

v

KARPEG      INVESTMENTS      (PRIVATE)     LIMITED     T/A      KADIR     &     SONS

SUPREME COURT OF ZIMBABWE

UCHENA JA,    MAKONI JA & KUDYA AJA

HARARE, 29 SEPTEMBER 2020 &  14 MAY 2021

T.L. Mapuranga, for the applicants

S. Hashiti, for the respondents

MAKONI JA: 	This is an appeal against the whole judgment of the High Court, handed down on 24 January 2018, wherein it dismissed the appellants’ claim.

BACKGROUND FACTS

The first appellant is a private voluntary Trust established in terms of the laws of Zimbabwe. The second appellant is Mukonotronics (Private) Limited a corporate body registered in terms of the laws of Zimbabwe. The respondent is Karpeg Investments (Private) Limited a Zimbabwean corporate body trading under the name Kadir and Sons.

On 31 July 2008 the first appellant registered certain industrial designs, being surge protectors, in terms of the Industrial Designs Act [Chapter 26:02] (The Act). It was issued with a certificate of registration in its name which was valid for a period of 10 years.

On 9 July 2019, the appellants issued summons against the respondent claiming that it infringed their exclusive rights which are protected in terms s 15 of the Act, by making or importing or selling or offering for sale articles in respect of its registered design.  Consequently, the appellants sought a permanent interdict against the respondent.  The appellants also claimed for inter alia damages arising out of the infringement.

In its defence the respondent filed an exception to the summons and declaration stating that the summons contained no cognizable cause of action. It averred that in terms of s 8 of the Act, under which the appellants’ design could have been registered, only persons at law could register such designs.  A trust, not being a legal person, cannot therefore obtain registration of a design in terms of the Act. It further averred that the design in issue was registered in the name of the trust and not in the names of the trustees. The registration of the design was a nullity at law and of no force or effect so it contended. There was therefore no basis upon which the appellant could allege an infringement of a right not properly registered.

The exception was determined by Muremba J who dismissed it on the basis that the respondent had adopted the wrong procedure. It ought to have raised its complaint by way of a special plea rather than except to the summons.

Having dismissed the exception, the court felt the need to proceed to the merits of the matter. It opined that it needed to determine the question whether the registration of the industrial designs by the appellant was a nullity or not. The court ruled that there was no law which prohibits registration of designs in the name of a Trust.  The court relied on the authority of Mafirambudzi Family Trust & Others v Trust Madzingira & Others HC 1522/13 and ruled that the trustees qualified to apply for the registration of designs on behalf of a Trust in terms of s 8 of the Act. After considering various authorities it concluded that the registration was not a nullity.

Thereafter the matter proceeded to trial. The issues referred to trial were as follows:

Whether or not the respondent’s goods infringed upon the appellant’s intellectual property rights.

Whether or not the appellant was entitled to a permanent interdict barring the respondent from reproducing, selling or offering for sale, exporting or otherwise dealing in appellant’s specified works.

Whether or not the appellant was entitled to any damages and if so the quantum thereof.

The following admission was made:

“It is common cause that the Industrial Designs are registered in the name of Mukono Family Trust.”

The respondent persisted, at trial, with its defence that the design was not properly registered as a Trust had no capacity to obtain registration of a design in terms of s 8 of the Act. It was raised as a point of law.

The court a quo opined that the onus to prove whether the design was properly registered rested upon the first appellant. It held that a Trust was not a juristic person and thus cannot own property in its own right. It found that the order granted in Mafirambudzi supra did not detract from the legal position that a Trust cannot own property in its own right. Having found that the registration by the Trust was a nullity for the reason that it was not a legal persona capable of owning, corporeal or incorporeal property nor could it register property neither could it have property registered in its name, the court a quo dismissed the application with costs on a higher scale.

Aggrieved by the decision of the court a quo, the appellants noted the instant appeal on the following grounds;

GROUNDS OF APPEAL

“The court a quo erred in finding that the registration of the designs which were registered in the name of the Mukono Family Trust were (sic) a nullity notwithstanding that the said registration was done in the name of a body of persons to whom the rights in the design had been assigned in accordance with s 8(b) of the industrial Designs Act [Chapter 26:02].

The court a quo erred in finding that the appellants had no rights upon which an interdict could be granted notwithstanding the existence of a registered industrial design in the appellants’ works as well as copyright and trademark rights in the said design.

The court a quo erred in awarding costs on a higher scale against the appellants absent any competent basis for doing so.”

ISSUES FOR DETERMINATION

Both the appellants and the respondent, in their Heads of Argument raised points in limine. The respondent firstly took the point that the certificate of the design, on which the appellant   makes plaint, had expired by the time of noting the appeal. Any cause of action founded on it equally terminates.  Secondly it raised the point that the appellants cannot raise an issue on appeal that they did not address before the court a quo. The appellants took the point that the court a quo erred in traversing an issue that was res judicata and had already been disposed of by Muremba J.  I will deal with the three points first before delving into the merits.

Whether or not the expiry of the certificate of registration of the design, at the time of noting the appeal, renders the appeal academic.

Mr Hashiti, for the respondent, submitted   that at the time of noting of the appeal the certificate of registration of the design in issue had expired. Such expiration rendered the appeal academic and any cause of action founded on same equally terminates. He further submitted that the law states that one cannot bring proceedings based on a non-existent right. As for authority for this proposition he relied on the cases of Alfred Mpfumbatwa v Babra Musariranwa & Ors HB78/13 and Chidawu & Others v Shah & Others SC12/13.

Mr Mapuranga, for the appellant, conceded that the certificate had expired as at the time of noting the appeal. He however argued that the appellant could   still claim   damages for the period when the certificate was valid. The action was instituted and judgment rendered during the life time of the design.

The appellant instituted proceedings in the court a quo on 9 July 2013. The judgement was rendered on 24 January 2018. The certificate of registration expired on 31 July 2018. The notice of appeal was filed on 14 February 2018. Both counsel were mistaken as to what the issue was. Clearly the certificate of registration was valid at the time of noting the appeal. It however had expired at the time of hearing the appeal. Was the hearing of the appeal rendered academic?  Put differently has the appeal been overtaken by events.

This calls for an examination of the appellants’ claims before the court a quo, their grounds of appeal and the relief sought before this Court.

Before the court a quo the appellants’ claims were as outlined below:

“A permanent interdict barring the defendant from reproducing, selling or offering for sell (sic), exporting or otherwise dealing in their works listed in paras 10 and 11 of the Plaintiff’s Declaration without written authorization from them.

An order that Defendant accounts for all the profits he has made as a result of infringing Plaintiff’s works for the period 1 February 2009 to date of Summons.

Damages calculated at 50% of the profits made by the Defendant as a result of his infringing actions.

Attachment and delivery up of all infringing copies or articles presently in his possession.

Costs of suit at the Attorney and own client scale.” (My emphasis).

From the grounds of appeal, that I have already set out above, the appellants challenge three issues namely (a) the declaration that the registration of the design in the name of the trust was a nullity (b) the finding that the appellants had no rights upon which an interdict could be granted (c) the award of costs on a higher scale without any competent basis to do so.

The position of the law, on whether a matter has been rendered academic, is ably articulated in Chidawu & Ors v Jayesh Shah & Ors SC 12/13 where it was stated that:

“The second respondent has, argued that the matter be dismissed as the relief sought by the appellants is no longer available as it has now been overtaken by events as the shares have been transferred.  As contended by the second respondent, correctly in the view of this Court, courts exist to settle concrete and live disputes or controversies. There can be no discernible benefit to be derived from this appeal being remitted. To remit the matter to the High Court would result in that court presiding over a matter where any judgment it passes would not benefit any of the parties.  The shares have now been transferred for value to a purchaser who to all intents and purposes is bona fide. The appellants on the papers before the High Court did not challenge the bona fides of the purchaser. They are not asking for a reversal of the transfer but an interdict against transfer of the shares. What relief then would the High Court give in the circumstances? The argument by the second respondent that this is an abuse of court process has merit and finds favour with this Court.  Courts should not be used to proffer legal advice and should only pronounce upon abstract questions and differing contentions in very rare circumstances. There would be no justification for embarking upon an abstract exercise in this case.”[My emphasis]

Regarding the issue of an interdict the respondent, in its Heads of Argument, correctly averred that an interdict can only be granted on an existing right and not a non-existent right. The purpose of an interdict is to stop an ongoing illegality from continuing, and in the absence of such conduct there would be no point in granting one. This position of the law was stated in Mayor Logistics (Pvt) Ltd v ZIMRA CCZ 7/14 as follows:

“An interdict cannot be granted against past invasions of a right nor can there be an interdict against lawful conduct.  Airfield investments (Pvt) Ltd v Minister of Lands& Ors 2004(1) ZLR 511(S); Stauffer Chemicals v Monsato Company 1988(1) SA 895;  Rudolph & Anor v Commissioner for Inland Revenue & Ors 1994(3) SA 771.”[My emphasis]

I must observe that the issue of whether the appeal was academic or not was raised by the respondent in its Heads of Argument. The appellants did not deem it necessary to file supplementary Heads of Argument addressing the issue. Mr Mapuranga cursorily addressed   the issue when called upon to motivate the appellants’ appeal. He contended that the appellants could still claim damages notwithstanding that the registration certificate had expired. He did not address the court regarding the issue of the interdict. I take it that he was conceding the fact that the interdict could no longer be granted.

In view of the above authorities and the position taken by the appellants the respondent’s argument that the issue relating to the interdict has been overtaken by events has merit. The court cannot grant an interdict against a past invasion.  I will therefore uphold the point in limine in as far as it relates to the interdict. With that finding the appellant’s second ground of appeal falls away.

This leaves grounds one and three for consideration of whether the appeal is now moot by virtue of expiration of the certificate of the design.

Regarding ground one the appellant takes issue with the finding of the court a quo that the registration of the design in the name of the trust is a nullity. I must point out that Mr Hashiti, in addressing whether the appeal is now academic, did not make any submissions directed at ground one. I will take it that he was conceding that the appeal remained alive in respect of this ground of appeal. The concession is properly made. The appellants, in the relief they seek before this Court, pray for a remittal of the matter to the court a quo for a determination of the matter on the merits. This includes determination of whether the appellants made out a case for a claim of damages against the respondent. As was correctly submitted by Mr Mapuranga the court a quo could still relate to that issue in respect of the period when the certificate of registration was still valid.

This ground of appeal raises two secondary issues. The first one is the point in limine taken by the appellant. The issue is whether the court a quo could traverse an issue that was res judicata in that it had been determined by Muremba J. The second issue is the second point in limine raised by the respondent. The point is that the appellant was given an opportunity to address the question of who applied for the registration of the design. It did not address the issue. Having failed to deal with the issue before the court a quo they cannot raise it on appeal.

I will consider the issue of res judicata first.

The appellants contended in their heads of argument that, firstly the court a quo determined an issue that was res judicata.  Secondly, the issue regarding the nullity of the registration of the design had been disposed of by Muremba J hence the court a quo erred in traversing the same issue.  Thirdly it erred in purporting to review the findings of Muremba J which concluded that the registration was not a nullity. And lastly the judgment by Muremba J had not been appealed against or otherwise set aside.

This issue should not detain the court. What was before Muremba J was an exception. She made a finding that the matter was not properly before her as the excipient had adopted the wrong procedure and consequently dismissed the exception. She should have ended there. She could not possibly interrogate the merits of the matter as that was not before her. The court became functus officio after the issuing of an order dismissing the exception.  In casu Muremba J proceeded to delve into the merits of the matter after issuing an order regardless of having no authority to do so.  The position of the law on this subject is as stated in Matanhire v BP Shell Marketing Services SC 05/05 as follows:

“The law on this point is very clear in that once a matter has been finalised by a court, that court becomes functus officio. Whilst it is true that there was no appeal against the judgment of MAVANGIRA J and this Court is not seized in this appeal with the correctness or otherwise of that judgment, the fact of the matter is that MAVANGIRA J’s judgment is not only patently wrong, it is also patently irregular in that it was purportedly made in terms of Order 23 which does not authorize her to grant such order.”

Similarly the appellant’s argument cannot succeed as it is predicated on a court order that is patently incompetent and irregular. Consequently it is my view that the appellant’s point in limine has no merit and must be dismissed.

Coming to the respondent’s second point in limine Mr Hashiti submitted that in the court a quo the respondent put in issue who between the Trust and the trustees had filled in the registration form for the registration of the design. The appellant did not deal with the issue. Having failed to deal with the issue at that stage it could not raise it on appeal. For authority on this proposition he relied on Mashavave v Standard Bank of South Africa 1998 (1) ZLR 436(S) at 439B where the court quoted with approval the remarks in Jones & Ors v Trust Bank Africa Ltd & Ors 1993  SA 415(C) at 425B-D where the following remarks were made;

“For a representation by silence to be capable of founding an estoppel, the silence must have occurred in circumstances which gave rise to a duty to speak”

Per contra Mr Mapuranga submitted that the validity of the registration of the design was not an issue before the court a quo. He referred to the issues as settled at the PTC which I have already alluded to. He added that the question of validity was a defence to the merits of the matter.

The court a quo treated this issue as a special defence and related to it first before determining the merits of the matter. It is trite and requires no authority that a point of law can be raised at any time provided there is no prejudice to the other party.

In determining the issue the court made the following observations on pages 9-10 of the cyclostyled judgment;

“At the close of the defence case (ie the end of evidence recording) the parties requested to make written closing submissions and this was granted them in usual order they would have orally addressed the court with plaintiff on who applied for the registration of the design with defendant insisting that it was the Trust plaintiff did not respond at all (sic).  For the avoidance of doubt paragraph 10 of the defendant’s heads of argument reads; “the application form by the plaintiff was filled in the name of the Trust and not the Trustees”. “Thus clearly putting the judgment per Muremba J of no moment.  Absent a right there cannot be an interdict.” Plaintiff did not challenge this submission.  The point was forcefully made that designs registered in the name of a trust make the registration a legal nullity-Grundall Bros P/L v Lazarus N.O and Anor 1990 (1) RLR 290 H at 298 E and F.

In the circumstances plaintiffs’ non rebuttal can well be understood.  The legal point made on behalf of defendant is beyond reproach.  It follows therefore that the registration of the designs which are the basis of plaintiff’s claim is a nullity and confers no rights on plaintiffs against any alleged infringement of the alleged rights by defendants.”

The court a quo arrived at its decision based on the fact that the appellant had not rebutted an issue raised by the respondent which would have assisted the court in determining the dispute between the parties. The question was whether it was the trust or the trustees who had applied for the registration of the design. The respondent’s contention was that it was the trust.  The appellant did not controvert the fact having been given an opportunity to do so. Mr Hashiti was therefore correct that the appellants cannot raise, on appeal, a point they did not address before the court a quo. The appellants cannot import new arguments on appeal. This Court in Mudyavanhu v Saruchera SC 75/17 had this to say on this point:

“An appeal court by nature is one that considers and assesses the correctness or otherwise of the decision of a lower court on any particular issue. Where no such issue is considered by an inferior court, it follows generally, that there is nothing for the appeal court to determine.” (emphasis added)

The second point in limine raised by the respondent has merit. I will therefore uphold it.  This dispose of the appellants’ second ground of appeal.

This leaves the third ground of appeal. There is no doubt that this ground relates to the merits of the matter and I will relate to it as such.

Whether or not the court a quo erred in awarding costs on a higher scale.

The appellants submitted that the court a quo erred in awarding costs on a higher scale absent any competent basis and without giving any reasons for so doing. Mr Hashiti, for the respondent, conceded the point. The concession was properly made.  Whilst it is within the court a quo’s discretion to award costs as it deems necessary, the question is whether it judicially exercised its discretion in awarding such costs. See Norwich Union Fire Insurance Society Ltd v Tutt 1960(4) SA 851(A) at 854D. The answer to that question can only be found in the court a quo’s reasons. In casu, the court a quo erred in awarding costs on a punitive scale in the absence of any reasons. It did not make any findings which form the basis of making such an award. It would be difficult for the court to ascertain the correctness of the court a quo’s decision in the absence of its reasons.  The third ground has merit and ought to succeed.

Regarding costs of the appeal Mr Hashiti prayed for punitive costs. He submitted that the appeal was a futile attempt to enforce nonexistent rights and was an unnecessary burden on the court. I was not persuaded to grant costs on a punitive scale as such costs are not warranted in this matter.

Accordingly, the appeal succeeds in part.

I therefore make the following order:

1 	The appeal succeeds in part in respect of the order awarding costs on a legal practitioner client scale.

2 	The judgment of the court a quo is amended by the deletion of the words “on the higher scale of a legal practitioner and client”

3       The appellant to pay costs of the appeal.

UCHENA  JA:				I agree

KUDYA AJA:				I agree

Donsa, Nkomo & Mutangi Legal Practice, applicants’ legal practitioners

S. Hashiti, respondents legal practitioners