Hollywood Curl (Pty) Ltd v Twins Products (Pty) Ltd (2)

• Jurisdiction: South Africa
• Judge: Corbett JA, Smalberger JA, Milne JA, Kumleben JA, Nicholas AJA
• Judgment Date: 20 September 1988
• Citation: 1989 (1) SA 255 (A)
• Hearing Date: 22 August 1988
• Court: Appellate Division

Corbett JA:

This is the second appeal referred to in the judgment of this Court in the matter of Hollywood Curl (Pty) Ltd and I International Hollywood Curl Hairdressers Suppliers and Training Centre v Twins Products (Pty) Ltd (case No 282/87) [*] , which is to be delivered immediately before

Corbett JA

A this judgment. The background facts in the present matter are to be found in the judgment in case No 282/87 and need not be repeated. I shall refer to the parties in this matter as 'Hollywood Curl' and 'Twins' respectively.

As indicated in the aforementioned judgment, Hollywood Curl was incorporated on 14 August 1984. On 18 February 1985 an attorney, Mr Salmon, of the firm John and Kernick, acting on instructions from B Twins and its sister company, Classique Products (Pty) Ltd ('Classique'), lodged with the Registrar of Companies ('the Registrar') an objection to the registration of the company name 'Hollywood Curl (Pty) Ltd'. The objection was raised on the grounds (i) that in terms of s 45(1) of the Companies Act 61 of 1973 ('the Act') such registration was undesirable and (ii) that in terms of s 45(2) of the Act the name C was likely to cause damage to Twins and Classique. The Registrar was accordingly requested to order Hollywood Curl to change its name. This objection was evidently referred by the Registrar to Hollywood Curl, for on 8 March the auditors of Hollywood Curl wrote to the Registrar indicating that, upon certain grounds, their client was not prepared to D change its name. A copy of this letter was sent by the Registrar to Mr Salmon for comment. Further correspondence passed between Mr Salmon and the Registrar and eventually on 9 August 1985 the Registrar notified him that he (the Registrar) was not prepared to make the order requested; and subsequently, upon request, he furnished written reasons for E his decision. Thereafter and in terms of s 48 of the Act Twins applied on notice of motion, citing Hollywood Curl and the Registrar, for an order with costs setting aside the Registrar's decision and directing Hollywood Curl to change its name within a period to be fixed by the Court. The application was opposed by Hollywood Curl, but not by F the Registrar, against whom no order for costs was sought.

As I have said, the two matters were heard together. In regard to the application with which this appeal is concerned the Judge of first instance granted the application with costs as against Hollywood Curl (such costs to include the costs of two counsel) and ordered G Hollywood Curl to change its name forthwith. Hollywood Curl now appeals to this Court (with leave of the Court a quo ) against the whole of the judgment and order of the Court a quo.

Section 45 deals generally with the power of the Registrar to order a company to change its name, translated name, changed name or H shortened form of name. As we are here concerned with a company name as originally reflected in its memorandum of association, I shall omit reference to these other forms of name. Accordingly, the relevant portions of s 45 read as follows:

'45. (1) If within a period of one year after the registration of I any memorandum... it appears that the name contained in the memorandum... is in the opinion of the Registrar undesirable, he shall within such period order the company concerned... to change the name... concerned.

(2) If within a period of one year after the registration of any memorandum... any person lodges an objection in writing with the J Registrar against the name contained in the memorandum... on the grounds that such name... is

Corbett JA

A calculated to cause damage to the objector, the Registrar may, if he is satisfied that the objection is sound, order the company concerned... to change the said name....

(3) If, at any time, the Registrar is of the opinion that the name of a company... gives so misleading an indication of the nature of its activities as to be calculated to deceive the public, he may order B the company concerned to change its name....'

With this section must be read also ss 41, 46, 47 and 48. Section 41 enjoins the Registrar not to register a memorandum if it contains a name for the company which, in the opinion of the Registrar, is 'undesirable'. Section 46 deals with how an order under s 45 for C the change of a company's name shall be conveyed to the company concerned; and when it becomes operative. It provides, inter alia, that the order shall require the company concerned to comply with it within two months from the date of its issue (s 46(1)). Section 47 empowers the Registrar for the purposes of any decision as to any name referred to D in, inter alia, ss 41 or 45 to call for such evidence 'on affidavit or otherwise' as he may deem fit; and also obliges the Registrar, upon request in writing of any person aggrieved by any such decision, and on payment of the prescribed fee, to furnish written reasons for any such decision. And s 48 provides that any company or person aggrieved by any decision of the Registrar under, inter alia, s 41 or by an order made E under s 45 may, within one month after the date of such decision or order, apply to the Court for relief and the Court shall have power to consider the merits of any such matter, to receive further evidence and to make any order it deems fit.

The Judge of first instance, having observed that in the application before him the applicant (now the respondent) relied upon s 45(2) F and having referred to the cases of Link Estates (Pty) Ltd v Rink Estates (Pty) Ltd 1979 (2) SA 276 (E) and Kredietbank van Suid-Afrika Bpk v Registrateur van Maatskappye en Andere 1978 (2) SA 644 (W), concluded as follows:

'On the basis then that I have found above that the applicant has G proved a passing-off and that the respondent's name ''Hollywood Curl'' is calculated (in the sense of ''is likely'') to cause damage to the objector, it follows that the applicant is entitled to the relief sought in this regard.'

The learned Judge's reference to passing off requires some explanation; and this in turn is assisted by a consideration of the legislative history pertaining to the sections to which I have adverted.

H The Act repealed and replaced the Companies Act 46 of 1926, as amended ('the 1926 Act'). The corresponding provisions in the 1926 Act relating to the name of a company and the powers of the Registrar in regard thereto were to be found in s 10. Of particular relevance are ss (1), (2) and (4). Subsections (1) and (2) read as follows:

I '(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 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 J mislead the public or to

Corbett JA

A cause annoyance or offence to any person or class of person or is suggestive of blasphemy or indecency or a name representing an occupation or profession for which personal qualifications are required.'

Subsection (3) is a long one and it is not necessary to quote it in full. It prohibited various words such as 'Government', 'State', 'United Nations', 'Imperial', 'Royal', 'Crown', and 'Empire' being included in the name of a company without the consent of the head of B State. Subsections (4)(a) and (b) read:

'(4) (a) If a company through inadvertence or otherwise has been registered in conflict with the provisions of ss (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 C which has been so registered in conflict with the provisions of ss (1) before the 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 ss (1) D or (2) is calculated to cause damage to any company or other person, such company or other person may call upon the Registrar to order a change of name.'

Subsection 4(c) fixed time limits within which a company had to comply with an order of the Registrar, on pain of committing an offence. Subsection 4(b), it is to be noted, was introduced by s 6 of Act 46 of 1952.

In its original form - and more particularly prior to its amendment E in 1952 - the section was plainly modelled on s 10 of the Companies Act 31 of 1909 (T) ('the 1909 Act'): see Charmfit of Hollywood Inc v Registrar of Companies and Another 1964 (2) SA 739 (A) at 746G. In fact, ss 10(1) in the two Acts respectively are virtually in identical terms. In the case of Union Steel Corporation Ltd v Registrar of Companies 1920 TPD 266, the Court (De Villiers JP) considered what was meant by F the provision in s 10(1) of the 1909 Act to the effect that a company might not be registered by a name so nearly resembling the name by which a company already in existence was registered as to be calculated to deceive, and stated (at 268):

'Those words are taken from the English Act, and they have already received judicial interpretation in England and in the case to which Mr Barry has referred the Court, the British Vacuum Cleaner Co Ltd v G The New Vacuum Cleaner Co Ltd ([1907] 2 ChD 312), Parker J draws attention to the fact that in a previous case, the case of Aerators Ltd v Tollitt, Mr Justice Farwell came to the conclusion that the principles which underlie the...