Anti-Dissipation Interdicts in Counterfeit Goods Cases

There is nothing more frustrating to a trade mark proprietor than going through the effort of securing a judgment in a counterfeit goods case, only for the defendant to use every trick in the book to frustrate the collection of the judgment debt.

Often these delaying tactics have one reason and one reason only – to provide the defendant time to conceal, dissipate or secrete all of his funds or diminish the value of his assets so that there is nothing left to attach.

Fortunately, it is possible in our law to obtain an anti-dissipation interdict to freeze the defendants’ funds and assets pending the outcome of the litigation. This remedy derives its name from the case of Knox D’arcy Ltd & Others v Jamieson & Others and can be brough by way of an interlocutory application at any time during the action procedures to secure the plaintiff’s claim against the defendant. An application of this nature takes the form of an interim interdict and brought on an ex parte basis.

A court will grant an anti-dissipation interdict where there is evidence that the defendant is concealing, dissipating or secreting funds or diminishing the value of the assets with mala fidei intentions of defeating a plaintiff’s claim. If the plaintiff is successful, the anti-dissipation interdict will secure the funds or assets upon which the plaintiff can levy execution. The objective of such an interdict is essentially to prevent the plaintiff from being stuck with a hollow judgment debt.

We recently assisted a client to successfully secure an anti-dissipation interdict in litigation relating to the counterfeiting of the clients’ famous skin care product. The defendant in question was also involved in money laundering and was hiding funds in several bank accounts of corporations either linked directly, or indirectly, to him.

We successfully demonstrated that the defendant was engaging in well-designed scheme in bad faith with the sole intention of frustrating the execution process. The Court consequently granted the order freezing all of the defendant’s personal and business bank accounts, pending the outcome of the litigation.

Therefore, anti-dissipation interdict has proved to be a powerful tool in counterfeit goods cases to ensure the successful execution of the judgment debt.

Godfrey Budeli
Partner | Trade Mark Attorney
Christoff Pretorius
Senior Associate | Attorney