Charmfit of Hollywood Inc v Registrar of Companies and Another

• Jurisdiction: South Africa
• Judge: Steyn CJ, Ogilvie Thompson JA, Rumpff JA, Van Wyk JA and Wessels JA
• Judgment Date: 26 March 1964
• Citation: 1964 (2) SA 739 (A)
• Hearing Date: 06 March 1964
• Court: Appellate Division

E Ogilvie Thompson, J.A.:

The facts appear from the judgments of RUMPFF, J.A., and VAN WYK, J.A., which I have had the advantage of reading. Although appellant's petition to the Provincial Division was based solely on sec. 10 (2) of the Act, the applicability of sec. 10 (1) was F fully debated in both Courts. I agree that, for the reasons appearing in the judgments of my Brethren, sec. 10 (1) of the Act cannot be invoked by appellant. I proceed to indicate the reasons which lead me to share the conclusion of my Brother VAN WYK that this appeal should fail.

G In its original form, sec. 10 of Act 46 of 1926 was plainly modelled upon sec. 10 of the Transvaal Act, 31 of 1909. The first four sub-sections of the Transvaal Act read:

'10. (1)

A company may not be registered by a name identical with that by which a company in existence is already registered, or so nearly resembling that name as to be calculated to deceive, except where the company in existence is in the course of being dissolved and signifies its consent in such manner as the Registrar requires.

(2)

H A company may not be registered by a name calculated to cause annoyance or offence to any person or by a name suggestive of blasphemy or indecency.

(3)

A company may not, without the consent of the Governor, be registered by a name which includes the words 'Imperial', 'Royal', 'Crown', 'Empire', 'Government', or any other word which imports or suggests that it enjoys the patronage of His Majesty, or of the Governor, or of the Imperial or Colonial Government, but nothing in this sub-section contained shall be construed as preventing the name held by an existing company at the commencement of this Act from being registered as the name of that company.

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(4)

If a company, through inadvertence or otherwise, is registered in conflict with the provisions of sub-sec. (1) or sub-sec. (2) or sub-sec. (3) the company may, in the circumstances described in sub-sec. (1), with the sanction of the Registrar, change its name, and shall, in the circumstances described in sub-sec. (2) or sub-sec. (3), change its name.'

A Save for the addition of a reference to a 'foreign company', sec. 10 (1) of the 1926 Act was (and remains) virtually in the same words as sec. 10 (1) of the 1909 Act. Sec. 10 (3) of the 1926 Act amplified, but was (and, though since extended, still is) in principle substantially the same as sec. 10 (3) of the 1909 Act, while sec. 10 (4) of the 1926 Act was (save for the omission of the unnecessary repetition of the word 'sub-section') identical with that of the 1909 Act. In sec. 10 (2) of B the 1926 Act, however, the Legislature introduced a substantial change. For, whereas sec. 10 (2) of the 1909 Act was couched in the same absolute terms as secs. 10 (1) and 10 (3) (viz.: 'a company may not be registered . . .'), sec. 10 (2) was in the 1926 Act expanded, inter alia, (i) by the inclusion of the phrase 'calculated to mislead the C public', and by the addition, at the end of the sub-section, of a reference to 'an occupation or profession for which personal qualifications are required'; and (ii) by the introduction, as the criterion of non-registrability under this sub-section, of the opinion of the Registrar, subject only to a contrary direction by the Court. For greater clarity and convenience of reference, I here reproduce secs. 10 D (1), (2) and (4) of the 1926 Act as originally enacted (the wording of the first two sub-sections still remains unchanged to-day) viz.:

'(1)

A company may not be registered by a name identical with that by which a company or a foreign company is already registered, or so nearly resembling that name as to be calculated to deceive, except where the already registered company is in the course of being E dissolved and signifies its consent to the registration in such manner as the Registrar requires.

(2)

The Registrar may, except upon an order of the Court, refuse to register a company by a name which, in his opinion, is calculated to mislead the public or to cause annoyance or offence to any person or class of persons or is suggestive of blasphemy or indecency or a name representing an occupation or profession for which personal qualifications are required.

(4)

F If a company, through inadvertence or otherwise, is registered in conflict with the provisions of sub-sec. (1), (2) or (3), the company may, in the circumstances described in sub-sec. (1), with the sanction of the Registrar, change its name, and shall, in the circumstances described in sub-secs. (2) and (3), change its name.'

I shall presently revert to what is, in my view, the correct construction of sec. 10 (2); but, agreeing as I do with TROLLIP, J., G that the true meaning of sub-secs. (1) and (2) - which have remained unchanged since 1926 - cannot be altered by the provisions of sub-sec. (4) substituted 26 years later, I pause here to make three observations. First, sub-sec. (1) of the Transvaal Act dealt only with a comparison of names 'calculated to deceive': sub-sec. (2) of that Act H dealt with a proposed name which was objectionable, not because of comparison with the name of another company, but on general grounds of public policy. That same pattern was continued in the 1926 Act. Piracy of a name - a matter primarily concerning the company whose name is pirated - is dealt with under sub-sec. (1); while considerations more applicable to the general public or to public policy fall under sub-sec. (2). Second, bearing in mind the general pattern of these two sub-sections in the 1926 Act, and without placing any undue emphasis upon

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the difference between the words 'deceive' and 'mislead', it is, in my view, inherently improbable that the expression 'calculated to mislead the public' occurring in sub-sec. (2) was intended by the Legislature to A introduce into that sub-section a comparison between the names of two companies. Third, although sec. 10 (2) of the 1926 Act is couched in negative permissive language, it is implicit therein that, when deciding whether or not to register a name, the Registrar must address his mind to, and form an opinion upon, the presence or otherwise of the various prohibited features listed in that sub-section. (Compare also the wording of sub-sec. (5) bis cited below). The absence of any provision B for advertisement, enquiry, or the hearing of objections to the name proposed to be registered is, in my opinion, strongly in favour of the view that the Registrar must form his aforementioned opinion upon the information ordinarily available to him: that is to say, upon the information reflected in his registers, in the application before him, C and in his general knowledge as a responsible official, supplemented by such further information, if any, as he in any particular case may require to be furnished in order to enable him to reach a decision. It does not appear to me that the Legislature contemplated any elaborate enquiry before the Registrar makes a decision under sec. 10 (2).

D As already mentioned and as appears from the above citations, sec. 10 (4) of the 1926 Act was for all practical purposes identical with sec. 10 (4) of the 1909 Act. The result of thus reproducing sec. 10 (4) of the 1909 Act in the 1926 Act without any consequential amendment to cover the new situation created by the alteration in sec. 10 (2) brought E about by the 1926 Act was (a) to retain the limitation of the change in name to cases where registration had been effected

'through inadvertence or otherwise . . . in conflict with the provisions of sub-sec. (1), (2) or (3)';

and (b) to introduce, in cases falling under sec. 10 (2), the somewhat difficult concept of registration having been effected 'in conflict' with an opinion. In addition, the 1926 Act, like its 1909 predecessor, F omitted to make any provision expressly authorising any person or company to take the initiative in bringing about the change of name. The lack thereof, together with the absence of any express provision for the Registrar to call for, or hear, objections to any proposed name, may be advanced in favour of the view that the words 'or otherwise' in the G expression 'through inadvertence or otherwise' (an expression also to be found in sec. 61 of the old Cape Companies Act, 25 of 1892) should, in the Act as originally passed, be accorded a restrictive interpretation. However that may be, sec. 6 of Act 46 of 1952 introduced section 10 (4) in its present form and also a new sub-sec. (5) bis. These read:

'(4) (a)

H If a company through inadvertence or otherwise has been registered in conflict with the provisions of sub-sec. (1), (2) or (3), the Registrar shall order the company to change its name:

Provided that -

(i)

The provisions of this paragraph shall not apply to a company which has been so registered in conflict with the provisions of sub-sec. (1) before commencement of this paragraph; and

(ii)

any such company may, with the sanction of the Registrar, change its name.

(b)

Wherever a registration in conflict with the provisions of sub-sec. (1) or (2) is calculated to cause damage to any company or other person.

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such company or other person may call upon the Registrar to order a change of name,

(c)

(Provides sanction for failure to comply with the Registrar's order).

(5)

bis. No name by which a company may not be registered under sub-sec. (1) or (3) and no name in respect of which registration may be refused under sub-sec. (2) shall be adopted by a company upon a change of name, whether under sub-sec. (4) or sub-sec. (5)'.

A When regard is had to the history of this legislation as outlined above, the object of this new sec. 10 (4) (b) was, in my view, to confer a locus standi to 'call upon the Registrar to order a change of name'. Such...