Deutsche Babcock SA (Pty) Ltd v Babcock Africa (Pty) Ltd and Another

• Jurisdiction: South Africa
• Citation: 1995 (4) SA 1016 (T)

Deutsche Babcock SA (Pty) Ltd v Babcock Africa (Pty) Ltd and Another
1995 (4) SA 1016 (T)

1995 (4) SA p1016

Citation	1995 (4) SA 1016 (T)
Case No	2359/94
Court	Transvaal Provincial Division
Judge	Mynhardt J
Heard	August 30, 1994
Judgment	October 25, 1994

Flynote : Sleutelwoorde B

Company — Formation and constitution — Name — Whether undesirable in terms of s 45(1) and (2) of Companies Act 61 of 1973 — Where, because of C similarity, there is likelihood of confusion between an existing name and new name, new name ought to be held to be undesirable.

Company — Formation and constitution — Name — Whether calculated to cause damage in terms of s 45(2) of Companies Act 61 of 1973 — Likelihood that businesses of companies would be confused because of similarity of their D names and company being able to pass off its business as that of another to latter's detriment — Although products of the companies were not interchangeable, name calculated to cause damage.

Headnote : Kopnota

The Legislature has set its face against company names which are 'undesirable' and the Registrar of Companies has a wide discretion to E decide whether a particular name is acceptable. (At 1021F-H and 1022A/B-B/C.) A name ought to be held to be undesirable within the meaning of s 45(1) and (2) of the Companies Act 61 of 1973 if, because of its similarity to that of another company, it is likely to mislead the public, or a section thereof, or if there is a serious risk of confusion to the public. (At 1024G/H-H.) A company cannot adopt a name which is likely to have this effect, even if it would merely formalise a de facto situation. The same applies to the use of a trade mark. The fact that a company is F entitled to make use of an unregistered trade mark does not per se mean that a company can incorporate it in its name with impunity. (At 1025B/C-E, paraphrased.)

In an application in a Provincial Division in terms of s 48 of the Companies Act 61 of 1973 for an order declaring that the applicant's name was not undesirable or calculated to cause damage as envisaged by s 45 of the Act, and for an order that the second respondent (the Registrar of Companies) enter its name in the register of companies,

G Held, applying the above principles, that it was undesirable for applicant to continue to trade under its new name, the Court having taken the following factors into account: (1) the areas of operation and the kind of business in which the applicant and the first respondent were involved; (2) the nature of their names and the fact that 'Babcock' was the dominant word in both; (3) the evidence adduced by the first respondent of confusion that had occurred in practice and which would probably occur in the future; and (4) the inconvenience suffered by the first respondent. H (At 1027H-I/J and 1029C.)

Held, further, that, although the products of the two companies were not interchangeable, there was at least a reasonable likelihood of the applicant being able to pass off its business as that of the first respondent, to the latter's loss, should it be permitted to carry on its activities under its new name. (At 1028 and 1029B/C-C.)

Held, accordingly, that the applicant's new name was 'calculated to cause I damage' to the first respondent within the meaning of s 45(2) of the Act. (At 1029C/D.) Application dismissed.

The following decided cases were cited in the judgment of the Court:

Abacus Finance Ltd v Registrar of Companies (1985) 2 NZLR 607

Allied Technologies Ltd v Altecno (SA) (Pty) Ltd and the Registrar of Companies (TPD, 8 May 1989, case No 11745/88, unreported).

J Brian Boswell Circus (Pty) Ltd and Another v Boswell-Wilkie Circus (Pty) Ltd 1985 (4) SA 466 (A)

1995 (4) SA p1017

A Computer Training College BK v Registrateur van Beslote Korporasies en Pathos BK (TPD, 8 March 1994, case No 14246/93, unreported)

Hollywood Curl (Pty) Ltd v Twins Products (Pty) Ltd (2) 1989 (1) SA 255 (A)

Kredietbank van Suid-Afrika Bpk v Registrateur van Maatskappye en Andere 1978 (2) SA 644 (W)

Link Estates (Pty) Ltd v Rink Estates (Pty) Ltd 1979 (2) SA 276 (E)

Miriam Glick Trading (Pty) Ltd v Clicks Stores (Transvaal) (Pty) Ltd and Others 1979 (2) SA 290 (T)

B Pacific Life Ltd v First Pacific Life Insurance Ltd (New Zealand High Court, case No M784/86 (Auckland), unreported)

Reckitt & Colman SA (Pty) Ltd v S C Johnson & Son SA (Pty) Ltd 1993 (2) SA 307 (A)

Sika (NZ) Ltd v Sika Technology Ltd and the Registrar of Companies (NZ CA, case No CA154/92, unreported)

C South Pacific Airlines of New Zealand Ltd v Registrar of Companies (1964) NZLR 1

Trade Consultants Ltd v Registrar of Companies and International Trade Consultants Ltd (New Zealand High Court (Hamilton), case No M514/84, unreported).

Vicom New Zealand Ltd v Vicomm Systems Ltd (1987) 2 NZLR 600 D

Case Information

Application in terms of s 48 of the Companies Act 61 of 1973 for an order declaring that applicant's name was not undesirable or calculated to cause damage as envisaged by s 45 of the Act. The facts appear from the reasons for judgment.

C E Puckrin SC (with him J N Cullabine) for the applicant.

D J B Osborn SC (with him A P Trichardt) for the first respondent. E

No appearance for the second respondent.

Cur adv vult.

Postea (25 October 1994). F

Judgment

Mynhardt J:

This is an application in terms of s 48 of the Companies Act 61 of 1973 ('the Act') for an order, firstly, declaring that the applicant's name, Deutsche Babcock SA (Pty) Ltd, is not undesirable or calculated to cause damage as envisaged by s 45 of the Act and, secondly, G that the second respondent enter the applicant's said name in the register of companies.

On 6 January 1994 the second respondent ordered the applicant in writing to change its said name within a period of two months from the date of the order. That order was made by the second respondent in terms of s 45(2) H of the Act after he had considered an objection by the first respondent against the applicant's said name, and after he had also considered the contentions that were advanced by the applicant as to why the first respondent's objection ought not to be sustained. The second respondent, however, came to the conclusion that the objection was sound and therefore he made the said order. The applicant then launched this application in I order to obtain the relief sought in the notice of motion.

Many of the relevant facts in this case are either common cause or not really in dispute, and may be thus stated. The first respondent was incorporated in South Africa on 26 August 1960 as ABC Component J Manufacturers (Pty) Ltd. On 11 October 1960 the first respondent's

1995 (4) SA p1018

Mynhardt J

A name was changed to Babcock and Wilcox of Africa (Pty) Ltd. Since that date the first respondent has always traded in the Republic of South Africa under a name which includes the name, or word, 'Babcock'. On 3 May 1979 the first respondent's name was once again changed to its present name. This was done in order that the Babcock and Wilcox name be simplified, as up to that stage it was part of the name of the group of B companies which carried this name throughout the world. At all times the first respondent has been a wholly owned subsidiary of a company which is presently known as Babcock International Group plc. This company is a British company. It is also the proprietor of the registered trade mark 'Babcock' in South Africa and in respect of which the first respondent is a registered licensee. The principal business undertaking carried out by C the first respondent is the business of boiler construction and general mechanical engineering.

The first respondent's holding company, Babcock International Group plc, has, apart from trading in various overseas countries, been trading in D South Africa on a fairly large scale for approximately 70 years through various subsidiaries, of which the first respondent is one. All these companies include the word 'Babcock' in their names. These subsidiaries comprise the South African Babcock Group of Companies ('the Babcock Africa Group') and all of them are controlled by Babcock International Group plc. E It can therefore be said, with justification, that the name or word 'Babcock' has become distinctive to the first respondent and its holding company in the fields of boiler construction and mechanical engineering in the Republic of South Africa.

In 1970 a company, DB Thermal (Pty) Ltd, was incorporated in South Africa. The letters or acronym 'DB' were an abbreviation for 'Deutsche Babcock' F and were understood to mean, and were synonymous with, 'Deutsche Babcock' in the relevant market. This company was one of the members of the Deutsche Babcock Group. The ultimate holding company of DB Thermal (Pty) Ltd was Deutsche Babcock AG, a company which is incorporated and based in Germany. Deutsche Babcock AG is a large multinational company, which had G a turnover in excess of DM 8 billion in 1993. It has a number of overseas subsidiaries, many of whom also incorporate the name or words Deutsche Babcock or Babcock in their names.

As from 1 October 1992 DB Thermal (Pty) Ltd has changed its name to Deutsche Babcock (SA) (Pty) Ltd, which is in fact the applicant in this H matter. The change of name was registered on 15 June 1992. Since 1 October 1992 the applicant has traded under its new name in South Africa.

The applicant has always been a representative of Deutsche Babcock AG in the Republic of South Africa. It has imported and sold that company's I products here. Deutsche Babcock AG is also the holder of an unregistered trade mark, 'Deutsche Babcock', and that trade mark has been utilised in South Africa for the sale of the applicant's holding company's products.

The main object of the applicant is to carry on the business of manufacturers...