SCA spells out procedure under Section 5(4) of the Counterfeit Goods Act
30/11/2010

In a judgment handed down on 29 November 2010 in the matter between the Minster of Trade and Industry v E L Enterprises (193/10) [2010] , the Supreme Court of Appeal considered the correct procedure to be followed in applications to confirm the seizure without a warrant of suspected counterfeit goods.

The procedure is prescribed by Section 5(4)(a) of the Counterfeit Goods Act No. 37 of 1997 (“the Act”). Since the commencement of the Act, the practice has been to bring a full-blown High Court application under the section on notice to the respondents. The court held that this is not the procedure contemplated by the section; though an applicant would not be non-suited by doing so provided that the application is at least issued within the prescribed time period.

Section 5(2) of the Act authorises customs officials, police officials and the like, as inspectors under the Act, to seize suspected counterfeit goods without a warrant, if there are reasonable grounds to believe that –

(a) the required warrant will be issued if application were to be made for it; and

(b) the delay that would be brought about by first obtaining the warrant would defeat the object of the seizure.

Section 5(4)(a) of the Act provides that a seizure “performed by an inspector by virtue of subsection (2) must be confirmed by a magistrate or a judge of the High Court having jurisdiction in the area where the (seizure was) performed, on the application of the inspector brought within 10 court days of the day on which (the seizure was) performed”.

The facts of the matter were briefly as follows:

• the Appellants seized without a warrant suspected counterfeit goods in the possession of the Respondents;

• the Appellants’ application under Section 5(4)(a) of the Act was brought to court on notice of motion;

• the application was issued on the 10th day following the seizure and was served on the Respondents the day thereafter.

The Respondents argued before the High Court that the word “brought” in Section 5(4)(a) means that the application must be issued and served within the 10-court day period referred to in the section. The High Court agreed.

The Appellants argued on appeal that Section 5(4)(a) does not contemplate an application on notice of motion; rather, it contemplates an application to a judge or magistrate in chambers. For this reason, so the Appellants argued, service of the application was not required or even contemplated by the legislature. The court agreed and held that this interpretation is consistent with other provisions of the Act, as well as the Uniform Rules and Magistrate’s Court rules.

The court held that there is no material difference between an application to a judge or magistrate with a view to obtaining a warrant authorising a contemplated seizure, on the one hand, and an application to a judge or magistrate to obtain the necessary confirmation for a seizure performed without a warrant, on the other.

The court accordingly upheld the appeal and also issued a declaratory order on the interpretation of Section 5(4)(a) of the Counterfeit Goods Act.

This judgment is to be welcomed by practitioners and brand holders, who have always been concerned about the costs of High Court litigation and the difficulty of having to identify potential respondents and serve applications on respondents who are intent on evading service.

Adams & Adams represented the Appellants on appeal.
Dale Healy
Adams & Adams
Partner
29 November 2010