Pivot Point SA (Pty) Ltd v Registrar of Companies and Another

• Judge: Coetzee J
• Judgment Date: 17 June 1980
• Citation: 1980 (4) SA 74 (T)
• Hearing Date: 17 April 1980
• Court: Transvaal Provincial Division

Coetzee J:

Pivot Point International Incorporated of Chicago in the United States is a company which operates in the field of hairdressing and hairdressing materials. It licenses companies in other parts of the world B as "Pivot Point Licence Distributor". As such distributor the local company is expected to provide a marketing and sales system for the products of the American company.

The present dispute originated because the second respondent's name was registered in anticipation of becoming a Pivot Point Licence Distributor. There were negotiations which broke down after a long period and the C written agreement was never signed. Thereafter the applicant was registered and it became the authorised Pivot Point Licence Distributor for South Africa. The name "Pivot Point" is apparently an important feature of this commercial operation, so much so that the American company D seems to insist that the local distributor should be known by that name. This is how it came about that two companies, the applicant and the second respondent, were registered with practically identical names. The only difference is that, in the case of the applicant, the South African connotation is to be found in the letters "SA" and in the case of the second respondent by the words "South Africa".

The second respondent was originally known as Carlton Wholesale, the E principals being Messrs Mayer and Hirschowitz. Correspondence as from January 1976 indicates that these two individuals were enthusiastically accepted by the American company to be an ideal "combination for creating a Pivot Point company". By 17 February 1976 these two gentlemen were F indeed addressed in a letter by the president of the American Corporation as "Pivot Point International - South Africa Carlton Wholesale". For about 18 months the second respondent continued to build up a business in South Africa based upon its expected formal appointment as a Pivot Point Distributor. However, by a letter dated 10 August 1977, they were informed as follows:

'RE: License agreement for South Africa and their sub licensees

G After much consideration, including a great deal of time spent during a trial period, I have come to the conclusion that it would be best for both parties concerned to go our separate ways.

We have decided to put forth our full effort into South Africa. We intend to set up our own operation, with our own personnel, instead of licensing out Pivot Point South Africa.

In that way, we would be fully responsible for all the right as well as wrong doings... including those happenings which have already occurred.

H Dwight Miller will be back in South Africa (his second appearance) in October.

Dot Gravell is now taking our 14 week curriculum. Seven weeks of hairdressing and seven weeks of chemical services. She will be well informed as to how our curriculums and teach-ins run.

We will be happy to service Carlton Hairdressing Organization at distributor prices.

Please advise as to how you would want us to notify your sub-distributors who have not as yet been serviced or answered.'

In pursuance of the American company's plans foreshadowed in this letter, the applicant was thereafter registered and I gather that the person

Coetzee J

mentioned in this letter, Dot Gravell, is the deponent to the founding affidavit of the applicant in the present proceedings. It should also be mentioned that a trade mark "Pivot Point" was registered by the American A company in South Africa with the Registrar of Trade Marks on 1 April 1971. The applicant contends that it was registered as a result of an agreement which had been concluded between it and the American company which inter alia provided for the use of the name "Pivot Point" by the applicant and the registration of the company under this name.

B The second respondent was originally known as JGI Investments (Pty) Ltd, which was changed to its present name during November 1976. It is obvious that this took place as a result of its anticipated relationship with the American company. However, after the applicant company had been registered and when the latter then became the South African licensee of the...