Peregrine Group (Pty) Ltd and Others v Peregrine Holdings Ltd and Others

• Jurisdiction: South Africa
• Judge: Hefer ACJ, Harms JA and Navsa JA
• Judgment Date: 31 May 2001
• Citation: 2001 (3) SA 1268 (SCA)
• Docket Number: 382/99
• Hearing Date: 07 May 2001
• Counsel: P Hodes SC (with A R Sholto-Douglas) for the appellants. M D Kuper SC (with P N Levenberg) for the respondents.
• Court: Supreme Court of Appeal

Harms JA et Navsa JA:

[1] The main issue in this case is whether the names of the respondent companies are 'undesirable' or 'calculated to cause E damage' to the appellant companies. In this regard reliance is placed upon s 45(2A) of the Companies Act 61 of 1973 (inserted by s 1(b) of Act 18 of 1990), which reads:

'Within a period of two years after the registration of any memorandum . . . or after the date of . . . a certificate of change F of name, . . . a person who has not lodged any relevant objection in terms of ss (2) may apply to the Court for an order directing the company concerned . . . to change the said name . . . on the grounds that the said name . . . is undesirable or is calculated to cause damage to the applicant, and the Court may on such application make such order as it deems fit.' G

Another issue closely allied to the question of 'calculated to cause damage' is one of passing-off. Both complaints concern the use of the word 'Peregrine' as part of the respondent companies' names and gave rise to an application in the Witwatersrand Local Division launched during August 1998. The application was dismissed with costs by Lazarus AJ and his judgment is reported as H Peregrine Group (Pty) Ltd and Others v Peregrine Holdings Ltd and Others 2000 (1) SA 187 (W). With leave of the Court below the appellants appeal against the dismissal of the application.

[2] The judgment of the Court below is extensive and contains a detailed history of the circumstances giving rise to the present I dispute. Only some of its factual and legal findings were attacked on appeal and in what follows we refer to such parts only as are relevant for purposes of this judgment.

[3] The respective details of the appellants' names are these: Peregrine J

Harms JA et Navsa JA

Group (Pty) Ltd (first appellant), Peregrine Properties (Pty) Ltd (second), Peregrine Project Finance (Pty) Ltd (third), Peregrine A Properties No 2 (Pty) Ltd (fourth), Peregrine Properties Share Block No 3 (Pty) Ltd (fifth), Peregrine Properties No 5 (Pty) Ltd (sixth) and Peregrine Properties No 6 (Pty) Ltd (seventh).

[4] Those of the respondents are Peregrine Holdings Ltd (first respondent), Peregrine Financial Services Holdings Ltd B (second), Peregrine Structuring (Pty) Ltd (third), Peregrine Networks (Pty) Ltd (fourth), Peregrine Equities (Pty) Ltd (fifth), Peregrine Commodities (Pty) Ltd (sixth), Peregrine Strategic Investments (Pty) Ltd (seventh), Peregrine Harvest (Pty) Ltd (eighth) and Peregrine Systems (Pty) Ltd (ninth). The case against three other respondents, C Peregrine Systems (Pty) Ltd, Peregrine Securities (Pty) Ltd and Peregrine Research (Pty) Ltd was withdrawn in the Court below because of the two-year jurisdictional limitation. The Registrar of Companies was a nominal respondent. It is accepted that the respondent companies adopted the Peregrine name without knowledge of the existence of the appellants and the question of lack of good faith or an D intention to ride on the backs of the appellants does not arise. Although not common cause in the Court below, it is now that the respondents nos 1 to 9 are not protected by the time limit of two years.

[5] Even though the appellants conduct their respective businesses from the same offices, utilise the same staff and share one E director, they are distinct companies without any legal connection and do not constitute a 'group' of companies within the meaning of the term in para 4(q) of Schedule 4 of the Act. The name of the first appellant is therefore misleading. The respondents, on the other hand, do form a proper group, the first being the holding company of F the second and the second, in turn, that of the others.

[6] Ignoring a basic rule of company law, the appellants founded their case upon the assertion that they constitute a group of companies and that they, in that capacity, have a vested interest and a right of exclusivity in the word 'Peregrine'. The use of the word by the G respondents, they allege, is undesirable since it may confuse the public and, in any event, it is calculated to cause them damage. By presenting their case on this basis the appellants themselves created a great deal of confusion and lapsed into generalisations and, instead of relying on evidence, relied on unsubstantiated allegations. This, quite rightly, did not endear itself to Lazarus AJ who commented (at H 203B - C):

'The...